Tarriffs

Running head: TARIFFS: PROS AND CONS

Tariffs: Pros and Cons

Mariah E. Davis

Columbia Southern University

July 26, 2015

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Introduction

Tariffs are defined as custom levies that are imposed on shipped goods. The levy is

traditionally calculated as a percentage of the collective cost of the shipment, inclusive of

transportation and guarantees. This factor increases the price of the shipment and provides a

benefit to local products in that specific market; these are almost never imposed on export

products. On average, tariffs hover at 5 percent; however, countries charge varying rates of

tariffs depending on the product the tariff is designed to protect. Customs authorities will also

impose sales duties, local duties and even additional customs levies. These levies are collected

when the shipments clear Customs.

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American trade policy makers constantly change their positions on whether the US

government will develop or establish tariff structures. In general, when a local sector perceives it

is under threat, the industry will pressure Congress into developing a trade restriction policy to

protect its local market. Again, this will help the industry weather intense foreign competitive

pressure; however, the imposition of the trade barriers will drive prices higher for the consuming

public. Simply put, the imposition or non-imposition of trade restrictions will mandate

compromises be arrived at between the need to shield critical and vulnerable industries and

raising the number of Americans with gainful employment. Moreover, retaliation is likely from

countries that will be negatively impacted by the imposition of these policies; this can degenerate

into a downward tailspin for industry, as what occurred during the period of the Great

Depression.

Throughout its history, the United States has imposed one form of trade restriction in its

trading activities with the global...