Question

5. Review the below-attached recent report on the expected consequences of the 30% tariff recently levied on imports of solar panels by the US Government. Answer the following questions exhaustively: a. What are the main arguments underlying the imposition of this new tariff? b. How is the new tariff expected to affect US consumers? c. How will it affect overall US jobs?

Answer 1

5. A) The main arguments underlying the imposition of new tariff is to increase import price of solar panels and thus reduce import of solar panels by US resident. The main reason behind doing so is to protect domestic firms that produce solar panels in USA.

B) US consumers will be worse off from the new tariff, because tariff increases the solar panels price that they pay. Also, the variety of solar panels that could be bought from foreign countries, decreases.

C) As new tariff increases domestic production of the solar panels, employment in this sector increases. Thus overall job opportunity in USA increases.