Tariffs on Agricultural Products
In the international trade agricultural goods have higher tariffs than manufactured items. This is because most countries engage in agriculture and therefore have agricultural products enough for domestic consumption and for sale. Many countries impose high tariffs to discourage importation of agricultural products. The cost incurred by farmers in developing countries for agricultural production is higher than that incurred by other farmers in developed countries. Therefore the agricultural products produced by the farmers in developing countries will definitely be more expensive than those produced in the developed countries. Because the government will want to protect the market from dumping it will impose higher tariffs on agricultural products with an intention of protecting the farmer from external competition. If the tariffs are not controlled by the government farmers from other countries will be able to export their agricultural products into the market at lower prices, therefore, affecting the domestic farmer.
These high tariffs have affect on both the prices of domestic and imported goods. The domestic prices will not be affected because the farmers will sell their goods based on the market price. On the other hand imported goods will have high prices because of the high tariffs imposed on them. The tariffs do not benefit the consumer because the consumer will be forced to consume the goods produced domestically which are cheaper than those imported. The consumer would benefit if the tariffs were reduced because imports will increase which will create more completion hence low prices. Importation also increases the variety of goods to consumers. On the other hand, domestic businesses benefit from the tariffs because they are protected from external competition. International businesses are not favored by the tariffs since the barriers for them to export are increased hence reducing their market coverage. However, tariffs are important because they are used to control international trading in different economies hence ensuring stability and growth in the market.