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Under what conditions may a tariff actually make a country better off?

1 Answer

3 votes

The conditions are:

* If tariffs tend to be small

* No retaliation by supplying nations

* No external costs such as rent seeking

If all of the conditions above are fulfilled, the country can protect the interest of local business without having to face larger economic blow back as a result. If the country that being imposed a tariff choose to retaliate, local businesses could experience an even problems since they can no longer export their products with competitive prices.

answered
User Tyler Olthuizen
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