USA HISTORY

Detailed explanation-1: -Tariffs have three primary functions: to serve as a source of revenue, to protect domestic industries, and to remedy trade distortions (punitive function). The revenue function comes from the fact that the income from tariffs provides governments with a source of funding.

Detailed explanation-2: -Tariffs can raise the cost of parts and materials, which would raise the price of goods using those inputs and reduce private sector output. This would result in lower incomes for both owners of capital and workers.

Detailed explanation-3: -The main objective of tariffs and quotas is to protect the domestic industries and jobs from high foreign competition because most commodities imported into countries are usually cheaper because of their low production costs.

Detailed explanation-4: -Tariffs are taxes placed on goods imported from foreign countries. Tariffs serve two main purposes. First, these taxes allow a nation to raise money. Second, tariffs protect a nation’s goods from cheaper priced foreign items.