The main purpose of most tariffs and quotas is to

Question

Business

Talan Buck

4 March, 05:53

The main purpose of most tariffs and quotas is to

+3

Answers (1)

Know the Answer?

Wu · Answer 1

Answer: The main purpose of most tariffs and quotas is to reduce the foreign competition that domestic firms face.

Explanation: A tariff is a tax on imports and a quota is the quantity imported that is allowed. By putting a tax and quantity limit on imports, the United States is hoping to make more room for domestic products to be bought and sold. When items are imported from other countries, even with the tax they are usually cheaper than making them in house. By imposing the tax, they are trying to offset the cheap labor and make the items in the domestic country have a fighting chance. This is also said about quantity limit, if there wasn't a quantity on what may be imported, there would be too few firms able to compete.