Export And Demand Of Goods

1680 Words7 Pages
Tariffs are sorts of taxes on imported and exported goods. It could affect the supply and demand of the merchandise. It started thousands of years ago when different countries’ merchants exchanged goods with each other. Governments who use tariffs to protect the local economy and national benefits play an important role in trading until now. It is a useful tool for governments to negotiate with other countries on diplomacy. However, tariffs become barriers to globalisation and it can have negative effect on domestic economy and industries. Today, with the globalisation, each country may still consider to protect their local economy first instead of removing tariffs from imported products. Interestingly, many countries would love to gather…show more content…
If local company product not as good as imported products, civilian may buy imported products. It would decrease the demand for local goods, which mean local brands might be broke up. According to Baghdasaryan D. and Žigić K (2010), government tariffs’ target is preventing imported products to have higher competitive position than internal products. Furthermore, tariffs could protect domestic industry. Therefore, government applies a tax to increase the price of imported goods for helping regional brands to survive in the market. Additionally, some countries tend to open market in worldwide after they regard that their economic would not have obvious affect from other countries especially developed countries, they require their products to have same treatment in other countries, this requirement not only benefit to the exported countries’ industry but also may offer well known product to the world. Gene, Joel and Chantal (2009) claims that, in the World Trade Organisation (WTO), countries should obligate the General Agreement on Tariffs and Trades (GATT), but the people of developing country doubt that GATT and WTO could benefit to their own country because the organisation was held by industrialised countries. The successful case like India and China who have joined the WTO after they dismiss tariffs barrier. So, tariffs, in most case, effect imported goods’ price for influencing the demand on imported goods. The reason for this is
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