Question

Who gains and who loses due to a tariff?

Answer 1

Answer : Tariff is a tax imposed by the government of a country on importing goods and services . After imposition of tariff import price increase in the domestic market , so price of goods increase as compared to before tariff . So after tariff , amount of import will reduced and domestic production increases but domestic cost do not rise( because tariff only paid by foreign producer who export to home country ) so profit increases and domestic producers gains but due to tariff , consumer pay more price , so they are losses and reduced their consumer surplus . Thus due to tariff , domestic producer will gains but domestic consumer suffer losses due to higher price .