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"Tariffs restrict trade" Discuss A tariff is a tax on imported goods. They are most often used in a deliberate attempt to restrict import. A tariff is likely to raise its final price to the consumer, this will lead to a fall in demand and the volume of imports will fall. Tariffs also help domestic producers. Some consumers will switch consumption from imported goods to domestically produced substitutes. Freeing up trade has led to the world becoming a richer place. This is because everyone gains, in the long run, from the opportunity to sell their products in a freer market. Trade between countries is mutually beneficial if relative costs of production differ. The gains from trade are often most significant in product areas where economies of scale are sizeable and transport costs are relatively low. The challenge of competition creates a more competitive economy; therefore freer trade keep businesses on their toes. It...

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