Question

Give your opinion about the arguments that support tariffs to protect the toddler industry. Explain how it relates to comparative advantage

Answer 1

The trade barriers are justified on the pretext of protecting the toddler or infant industries. These toddlers industries are critical industries and these industries can create the industrial base for the economy. But these industries must be protected initially against the competition from the international players. If these are exposed to the international competitions these would wither away from the market.

Though these tariffs help the toddlers to survive in the market , the benefits of comparative advantages are badly compromised. The trade is not conducted according to the comparative advantage and the demand for the domestic good see the rise. But the domestic consumers tend to get the goods at the higher price. Put differently, the consumer surplus declines.