Arguments against Protectionism

Question 1

Purpose of import tariff

Answer 1

Protect domestic industries from overseas competition via increasing the relative price of imports, thereby causing a fall in import.

Therefore, a higher proportion of demand will be met by domestic suppliers.

Question 2

Purpose of import tariffs (tax)

Answer 2

Generates government tax revenues who levy tariffs.

For many lower & middle income countries, import tariffs are an important source of income.