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Suppose a very high tariff was placed on steel imported into the United States. How would...

Suppose a very high tariff was placed on steel imported into the United States. How would that affect employment in the U.S. auto industry?

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Answer #1
  • Placing a very high Tariff on steel would rise the price of the Imported steel.
  • It would Encourage the consumers to buy domestic steel instead.
  • US firms will purchase more domestic US steel.
  • The US steel will benefit due to higher Tariffs
  • This would create and protect the jobs in the US steel Industries
  • But if tariffs lead to higher prices, other firms in US Economy will be affected.
  • They will be declined in the demand for other goods in the Auto industry.
  • US Auto firms Exporters will face high costs as a result of these Tariffs.
  • Will lead to the decline in competitiveness in the international firms.
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