Consequences Of Trade Restrictions And Tariffs Essay

Consequences of Trade Restrictions and Tariffs How does imposing trade restrictions affect a countrys macro economic objectives? nbsp;nbsp;nbsp;nbsp;nbsp;Nowadays all countries need to trade between themselves. Countries always lack of some type of good and the only way they can get them is by importing them from other countries which do produce the desired goods. However, countries many times import products they are able of producing and now, this isn ´t a matter of need; it ´s a matter of taste in order to give the consumers the possibility to choose. nbsp;nbsp;nbsp;nbsp;nbsp;Both imports and exports contribute, in different ways, to the development of a certain economy, for example the Peruvian one. Nowadays, Peru has an†¦show more content†¦nbsp;nbsp;nbsp;nbsp;nbsp;When this occurrs, then national products are ready (or at least have more possibilities) to compete in international markets. Supposedly, now they should have a better quality, they should be cheaper and so, they are ready to be exported. When products are sold at international markets, then this brings more money into the peruvian economy; as exports are like the salary of a country (the most important source of money), then this is very positive for the peruvian economy because we can say that the national income has increased. nbsp;nbsp;nbsp;nbsp;nbsp;So, we have seen how having imports and exports are very benefitial for any country. However, countries many times apply barriers to imports coming into the country in order to protect national products. The most common type of barrier applied are the tariffs. Tariffs are taxes applied to every imported product which comes into the country. In Peru, for example, the tariff rate has two values: one which is 15% of the original price (the most commonly applied) and the other one which is 25% of the original price (rarely applied, only for luxurious goods.) By applying this tariffs, then it may not be very profitable to bring certain products into the country, and, in this way, the national products are able to keep on in the same way, without worrying about having a powerfull competence. This type of barrier may allow certain nationalShow MoreRelatedTaking a Look at Free Trade775 Words   |  3 PagesFree trade is something that WTO encourages globally and ins ists that no government interference should take place in international trade and that this will be followed by specialisation and an increase in countries welfare. Countries however want a competitive advantage and to obtain this interference takes place in the form of restrictions. 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