Question

Why do tariffs on imports make trading a product less profitable in the US than in Asia?

Answer 1

Incase of a tariff on import, the cost of good rises for consumer making it more expensive. This further leads to a reduction in demand of the good by consumers.

Thus a tariff imported by US would mean the demand for good in US reduces. The same goes incase of tariff by Asia, i.e. the demand for good in Asia reduces.

Now, we know that dollar ($) has more value than any other currency in Asia. So, even a same quantum of decline in quantity demanded in the US and Asia, more loss in terms of lost value will be when we get lesser dollars as opposed to any other Asian currency.

So, tariffs on imports make trading a product less profitable in the US than in Asia.