Pros and Cons of Tariffs Essay Example | Topics and Well Written Essays - 1250 words

Pros and Cons of Tariffs - Essay Example It is evident from the study that tariffs help governments reduce competition from foreign companies to allow more opportunities for the growth of domestic industries and increased employment opportunities. As the government imposes a tax on imported goods, the foreign suppliers find it hard to supply to the locals. Thus, domestic producers receive a favorable price for their products and services since the market is unsaturated with goods. The local producers also produce and sell large quantities since the demand is high among the local market. Consequently, they become motivated to provide more products and services, thereby leading to economic growth and loyalty to domestic products. Tariffs may thus enable job retention and creation since local businesses will grow to an extent of employing more people to handle their goods and services. Governments also impose tariffs on imported and exported products as one of the sources of revenue. The taxes help the government to support it s many activities and functions. In fact, approximately 2% of the total government revenue comes from customs duties and taxes. Hence, imposing duties on exports and imports allow the government to fund economic developmental projects. Such projects include building of infrastructures like roads, maintaining social amenities, establishing and maintaining institutions, and paying public workers. Consequently, local businesses and foreign companies will find it easy to set up and conduct business operations in the country. They enable the country to spearhead the economic development and attract investments both from within and outside.