A tariff hurts

Question

the government by decreasing its revenue.

domestic producers who canʹt compete with cheaper imports.

consumers who will pay more for the imported good.

All of the above answers are correct.

Answer 1

The correct answer is "All of the above answers are correct."

A tariff can have several negative impacts:

1. The government: While tariffs can generate revenue for the government, they can also lead to decreased overall trade revenue, especially if the tariff leads to retaliation by other countries or if it reduces the amount of imported goods.

2. Domestic producers: Tariffs are typically intended to protect domestic industries, but they can hurt domestic producers that rely on imported materials or those that cannot compete with the increased prices resulting from tariffs on imported goods.

3. Consumers: Consumers are affected because tariffs often lead to higher prices for imported goods, which can result in reduced purchasing power and fewer choices in the market.

Thus, all of these groups can experience negative effects from tariffs.