The problem with using tariffs

This trade dispute hasn’t gained much press in the UK but it could have big implications on future relations between the US and China. Domestic pressure has caused the US to impose a 35% tariff on Chinese tyres. China didn’t take this lying down and have announced plans to impose a similar tariff on US chicken and cars. This is a great example of the dangers of imposing tariffs as countries are likely to respond in kind. Click read more for some questions on protectionism.

1. Explain two other protectionist policies available to the US.
2. Explain why the US may have decided to impose a tariff.
3. ‘Tariffs are the best way to protect a country from foreign competition.’ Do you agree with this statement? Give reasons for your answer.