Question

Which explains how US tariffs affect the prices of Chinese and US goods? They make Chinese goods cheaper and US goods comparatively more expensive. They make Chinese goods more expensive and US goods comparatively cheaper. They make Chinese goods and US goods roughly about the same price in the United States. They make Chinese goods and US goods roughly about the same price in China.

Answer 1

B.

Step-by-step explanation:

They make Chinese goods more expensive and US goods comparatively cheaper.

Answer 2

The correct answer is: "They make Chinese goods more expensive and US goods comparatively cheaper".

Establishing tariffs constitutes a protectionist approach in trade policy. The US aims to protect domestic producers by imposing a tariff on originally-cheaper imported products, to avoid their advantage when competing in prices with domestic ones. Imports usually come from countries when factors of production are cheaper and hence the final goods and cheaper too. As the US cannot compete in prices with such countries, imported goods are artifically made more expensive by using tariffs so that foreign producers do not expel domestic ones from the markets.