My question is, how exactly are tarrifs supposed effect the county on which they are being sanctioned?
For example, how is a 5% tarriff on Mexico supposed to effect Mexico?
In: Economics
So a 5% tariff is essentially an additional 5% tax that companies have to pay upon importing the product. The tariff is supposed to discourage companies from buying from a specific country. In reality, that doesn’t happen. That 5% just makes customers pay 5% more because that is cheaper and/or easier than finding another source for the product.
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