Any topic that includes microeconomics Term Paper

Any topic that includes microeconomics - Term Paper Example Tariffs have adverse effects on an economy. However, governments continue imposing them on investors who import commodities from foreign nations (Gregory 2000 p 16). This essay is a critique of the economic implications of tariffs. It highlights the major reasons why governments impose tariffs on imported goods, which include; protection of the emerging as well as aging and incompetent local firms from unhealthy foreign competition, to enhance sustainability of local companies through prevention of dumping effect from foreign companies which may offer their products locally at an extremely low price that leads to losses by domestic firms (Mansfield and Yohe 23). The essay also presents the negative views of tariffs in regard to promoting trade and economic growth, which have been supported by various organizations such as the WTO and Word Bank. The double impact of tariffs on the economy imposing the tariffs as well the economy on which the tariffs have been imposed is highlighted. The impact of tariffs on the prices of locally manufactured goods, changes in demand for the goods and employment in the economy imposing the tariffs has been illustrated using the United States as an example of an economy imposing tariffs on foreign products from china (Swire 2009), and the Republic of Korea which illustrates an economy that does not impose taxes on foreign products in the domestic market. The essay also indicates the invisibility of the negative impacts of tariffs on the economy compared to the projected advantages. It also indicates the areas that need further research regarding tariff imposition, whereby researchers can search for information from published sources. One of the major reasons why governments impose tariffs on imports is to enhance the development of the emerging domestic industries to attain a size that able to cope with foreign competition. In other words it is one of the