Key Diagrams - Import Tariffs
- A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 28 May 2022
This video walks through the key import tariff diagram.
In this video we walk through the basic effects of an import tariff applied to a product (steel) where the world supply price is lower than would normally be charged in a domestic market without trade.
For higher level analysis and evaluation, youwill need to develop the diagram to show some of the welfare effects of an import tariff and also to consider the importance of PED and PES when looking at the impact domestically of imposing this type of trade restriction. The impact also depends on the magnitude of the tariff imposed and the duration.
You might also want to introduce some game theory into your analysis and evaluation – to what extent is a persistent trade war a sub-optimal outcome from those countries involved?