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When a tariff is in place, imported goods cost more. That discourages local pouches to lower their prices because imports are much expensive than locally produced brands. The consumers end up losing by paying higher prices, while local producers make huge gains due to the high prices they have imposed on items.
Effects of tariff do differ with those of quota system. As opposed to the prices, quota regulates the amount in quantity of goods either imported or exported. The best way for a small country would be to maximise the tariff system to encourage local traders and manufacturers. The consumer should be protected either by subsidiaries or higher income.
Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 14th, 2015
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