Question

The United States exports about $36 million of cereal grain (wheat, barley.com, and oats) to Spain annually. Suppose the Spanish government were to retaliate against the U.S.olive tariff by imposing its own tariff on U.S. exports on cereal grain to Spain This would cause what?

Choose one or more:
A. the price of these grains in the United States to fall, reducing the profit of the U.S. farmer 8.
B. Spanish consumers and producers to pay less for products created with these grains the grain farmers in
C. Spain to be able to sell more of their grain and for a higher price than before
D. the U.S. grain farmers to experience a decrease in demand
E. the U.S.consumers and producers to payless for products that are produced with these grains

Answer 1

Option A, D and C are correct option. Imposing a tariff on U.S. cereal grain exports would likely lower U.S. grain prices, reduce profit for U.S. farmers, decrease demand for U.S. grain exports, and potentially allow Spanish farmers to sell more grain at higher prices.

Step-by-step explanation:

If the Spanish government were to retaliate against the U.S. olive tariff by imposing its own tariff on U.S. exports of cereal grain to Spain, several outcomes could be expected:

• A: The price of these grains in the United States could fall, reducing the profit of U.S. farmers.
• D: U.S. grain farmers would likely experience a decrease in demand for their exports.
• C: Spanish grain farmers might be able to sell more of their grain and possibly at a higher price than before, provided that the tariff sufficiently disincentives the import of U.S. grains.

Options B and E would generally not be the case, as tariffs are designed to protect domestic industries by raising the cost of imported goods, thus they would not result in Spanish consumers and producers or U.S. consumers and producers paying less for the affected products.