International Trade & Enterprise Assignment

Running head: INTERNATIONAL TRADE AND ENTERPRISE
International trade and enterprise
Name of the student
Name of the University
Author note

1INTERNATIONAL TRADE AND ENTERPRISE
Executive summary:
This report has analyzed the international trade and economic implication of tariff in the
economy. Besides this, the report has studied the various empirical evidences to trace out how
tariff affects the economies depending upon its nature. Moreover, it has highlighted the facts that
how tariff has performed for different economy from different perspective. The report gas given
a brief on the costs and benefits of a tariff and to conclude it has provided idea regarding trade
liberalization by reducing the tariff. Analyzing the various aspects of import tariff and its
economic implications, the report has found that imposing tariff on the importable introduce gap
between the producer surplus, consumer surplus and government revenue that leads to
deadweight loss. The report concludes with a view that, it is better to reduce the import tariff
because it can provide better sustainability of the economy and increase the competition among
the firms.

2INTERNATIONAL TRADE AND ENTERPRISE
Table of Contents
Introduction:....................................................................................................................................3
Different types of tariff and reason for implying it:........................................................................4
Protect Infant industry:................................................................................................................4
Enhance domestic employment:..................................................................................................5
Protect market from dumping:.....................................................................................................5
Protect the market from collapsing:.............................................................................................5
Protect environment:....................................................................................................................5
Economic implication of tariffs:......................................................................................................5
Effect of tariff on small open economy:......................................................................................6
Effect of tariff on large open economy:.......................................................................................7
Empirical evidence of tariff on different countries and its effect:...................................................9
Costs and benefits of a tariff:.........................................................................................................10
Price effect:................................................................................................................................10
Revenue effect:..........................................................................................................................10
Consumption effect:...................................................................................................................11
Effect on competition:...............................................................................................................11
Employment and income effect:................................................................................................11
Removing tariff:.............................................................................................................................12
Conclusion:....................................................................................................................................12
Reference:......................................................................................................................................14

3INTERNATIONAL TRADE AND ENTERPRISE