What are some of the economic effects of a tariff?

Question

Quizplus · Accepted Answer

Imposing a tariff increases the cost of imported goods, causing consumers to either buy less of those goods or switch to domestic alternatives. This leads to a decrease in imports and an increase in domestic production. However, because domestic producers are now facing less competition, they may become less efficient and may not be incentivized to innovate or improve their products. Additionally, the country that the tariff is imposed on may retaliate with their own tariff, leading to a decrease in exports and potential trade wars. Overall, the use of tariffs can lead to a decrease in economic efficiency.

What Are Some of the Economic Effects of a Tariff