Currently Belize, a country in Central America, has a small coffee industry but does not export any coffee. Suppose the government of Belize, in order to protect the new coffee industry to enable it to grow into a mature industry that can compete in world markets, places a tariff on the importation of coffee. What is the argument for placing the tariff on coffee?

Question

Quizplus · Accepted Answer

The infant-industry argument suggests that a new industry in a developing country should be protected from foreign competition by placing tariffs on imports. In this case, Belize is protecting its new coffee industry so that it can grow and become competitive in world markets.

Currently Belize, a Country in Central America, Has a Small