What is the effect of the high (15.3%) U.S.tariff on garments
Imported from Bangladesh on the Bangladesh economy?
A)It has no effect on the Bangladesh economy, since U.S. consumers ultimately pay the tariff.
B)It acts as a hidden tax of $4.61 on Bangladeshi citizens.
C)It improves Bangladesh's terms of trade with the United States.
D)It has a very small effect on the Bangladeshi economy, since only 10% of its exports to the United States are subject to the
Tariff.

Question

Quizplus · Accepted Answer

The high tariff on garments imported from Bangladesh acts as a hidden tax on Bangladeshi citizens, as the cost of production for these goods increases and the burden is passed on to consumers. This can have significant negative effects on the country's economy, including lower growth and employment opportunities. Option A is incorrect because the tariff does have an effect on the Bangladesh economy, as it affects the competitiveness of its exports. Option C is incorrect because improved terms of trade would mean that Bangladesh gets more value for its exports relative to its imports, which is not the case with a high tariff. Option D is incorrect because the 10% figure is misleading, as garments are a significant part of Bangladesh's exports to the US and the tariff has a disproportionate impact on this sector.

What Is the Effect of the High (15