International Economics: Impact of Tariffs on Developing Countries

This discussion post explores the implications of trade barriers, specifically tariffs, on both developed and developing countries. The author examines the impact of protectionist policies, such as those imposed by the US, on countries like Canada, China, and Turkey, focusing on the effects on the domestic steel industry and the broader implications for global supply chains and foreign investment. The post references scholarly sources to support the analysis of how tariffs affect consumer prices, investment decisions, and overall economic growth, particularly in developing nations. It also addresses the potential benefits and drawbacks of protectionism, concluding with an evaluation of whether a developed country should eliminate tariffs, supported by economic theories and evidence.

Running head: INTERNATIONAL ECONOMICS
International Economics
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Table of Contents
Discussion........................................................................................................................................2
References........................................................................................................................................3

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Discussion
The tariff or non-tariff trade barriers imposed on countries increased the cost of tax of
either imported or exported goods or services. Thus, the price paid by the consumers increased.
As a result, investment decision affected, which further induced tax rates and influenced
employment generation (Lake, 2018). Therefore, implication of trade barriers such as non-tariff
or tariff disrupts global supply chains. The global trading system impacted due to disorganized
distribution chains and supply. Several organizations are forced to relocate distribution centres or
factories to sustain. Therefore, global trading system affected by the imposition of tariff or non-
tariff barriers.
To boost the domestic industry trade protectionism policy is enforced, which may effects
the foreign investment of both countries participating in protectionism. US imposed
protectionism policy on Canada, China and Turkey. To protect the domestic steel industry from
competitors, US imposed trade protectionism on Canada, China and Turkey. These countries
also have trade protectionism policy to protect the domestic industry from foreign competitions.
Protectionism may encourage foreign investment, as the competition from foreign firms
decreased (Shenkar, Luo & Chi, 2014). Demand for the goods produced by the domestic players
increased. However, it is difficult for the developing countries to encourage foreign investment,
when there is trade protectionism. Developed countries like US may not directly impacted by the
trade protectionism policy but the costs of consumers rise. The imposition of trade protectionism
by US on Turkey and Canada increased the price of the products, which used steel as a raw
material. Therefore, foreign investment of both participating countries in trade protectionism
policy may affected by the protectionism.

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References
Lake, D. A. (2018). Power, protection, and free trade: International sources of US commercial
strategy, 1887–1939. Cornell University Press.
Shenkar, O., Luo, Y., & Chi, T. (2014). International business. Routledge.