If wages in Mexico are lower than those in Canada,

Question

Quizplus · Accepted Answer

Because wages in Mexico are lower, it means that goods produced in Mexico will likely be less expensive than those produced in Canada. This gives Canadian consumers the opportunity to purchase some lower-cost goods from Mexico. Imposing tariffs on imports from Mexico may not necessarily raise Canadian living standards, as it can increase the cost of goods and reduce competition. Neither country is necessarily expected to have a comparative or absolute advantage in all products simply based on wage differences.

If Wages in Mexico Are Lower Than Those in Canada