A Canadian tariff imposed on items that can be produced more cheaply abroad

Question

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When a tariff is imposed on items that can be produced more cheaply abroad, it creates a social loss. This is because the higher prices of imported goods will reduce consumer surplus for Canadians who buy these goods, and it could also lead to retaliatory actions from foreign countries which could harm Canadian producers who export their goods. This type of tariff also doesn't necessarily equalize the cost of production between Canada and foreign producers because Canadian producers may still face higher costs of production than their foreign counterparts even with the tariff in place.

A Canadian Tariff Imposed on Items That Can Be Produced