ction. In the graph, production effect can result in producer surplus +a.
Revenue effect: Tariff is imposed by the large countries, so the government can gain a lot in the form of tariff revenue. In this case, the government can make up the loss of consumer surplus. Although the total losses exceed the gains, but the loss in producers’ surplus is suffered by foreigners. All in all, the tariff can produce the net profit (c+e).
Net welfare effect: e-(b+d) If the large countries implement a tariff, it will increase the goods’price on the local market and reduce the price in the rest of the world. Once the large country carries out a small tariff, it will increase national welfare. If the tariff is too high, the national welfare will reduce. However, when it increases the national welfare, not everyone’s welfare increases (Jørgensen, Jan Guldager and Schröder, Philipp J.H, 2011).
Price effect: The tariff placed by a large country will play a role in the world price. As shown in the graph, the world price will reduce if the tariff is placed. About the resulting effects, consumers lose the area (a+b+c+d); producers gain area (a). Compared to small countries, the difference is the area (e) that measures the part of the government tariff revenues that are effectively paid by foreigners. The burden of this part of the government tariff revenues is carried by the foreign producers who now export to the country at a lower price. Whether a large country eventually gains or loses from the tariff depends on whether the gained area (e) is larger or smaller than the welfare loss associated with the area (b+d).
Trade effect: The tariffs of large countries are weak in protecting domestic producer.
5. Conclusion总结
Tariffs are taxes or duties levied on imports and exports. Tariffs not only influence the economic policies, but also political policies. Usually, tariffs have a distributive effect on the economy and politics. For the domestic market, tariffs can protect infant domestic industries and aging and inefficient local industries from foreign competition. Besides, tariffs can raise the government revenue and create more jobs. However, the effect of tariffs is different in small countries and large countries. With the help of diagrammatic analysis, it research the effects of tariffs from price, consumption, production, trade, revenue and net welfare. It concludes that large countries greatly influence the international price. Besides, the large countries can address the economic issues, help infant companies develop, and set the economic and political policies via tariffs. However, tariffs don’t impact world prices and the rest of the economy in the small countries. Therefore, tariffs have different effects on the small countries and large countries. It is very important for the government to reasonably apply to tariffs in the economy market.
6. Reference文献
Corden, W. M. (1974). Trade policy and economic welfare. Oxford: Clarendon Press. A discussion of economic arguments in favor of and against protection.
Effects of tariffs on foreign prices. (1987). Economic and Political Weekly, 22 (52), 2285-1186.
Importers combine for tariff purpose
本论文由英语论文网提供整理,提供论文代写,英语论文代写,代写论文,代写英语论文,代写留学生论文,代写英文论文,留学生论文代写相关核心关键词搜索。