Question

How will an increase in import tariff affect the domestic country and the foreign country. Analyze

Answer 1

An increase in the import tariff will increase the price of the goods imported in the national market at a higher price the demand for the goods will be low and that will lead to a lower consumer surplus and that will be transfred to producer surplus and government revenue and some dead weight loss.

Export was reducing the consumer surplus of the exporting nation , a tariff will decrease the exports and increase the consumer surplus in the exporting nation and decrease the producer surplus as they can't export more.