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

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The argument for placing a tariff on coffee in Belize is the infant-industry argument. This argument suggests that new industries need protection from international competition in order to develop and become competitive in the long term. By placing a tariff on imported coffee, Belize can protect its own coffee industry from being overwhelmed by cheaper imports and allow it to develop into a mature industry that can eventually compete in world markets.

Currently Belize,a Country in Central America,has a Small Coffee Industry