Question

In​ 1995, Mexico joined NAFTA. U.S. tariffs on imports from Mexico and Mexican tariffs on imports from the United States are gradually being removed. How have the quantity of U.S. exports to Mexico and the U.S.​ government's tariff revenue from trade with Mexico​ changed?

Answer 1

a) Increase in export

b) decrease in Tariff revenue

Step-by-step explanation:

a) The Quantity of U.S exports to Mexico will increase due to the decrease in market price of goods imported from US to Mexico which is occasioned by the removal of Mexican tariffs on imports from the United states .

b) The US tariff revenue from trade with Mexico will decrease drastically

Import Tariffs are one of the ways Government generates revenue for the economy hence when these tariffs are removed the revenue generated will be non-existent .