Tariffs hurt consumers because it increases the price of imported goods. Because an importer has to pay a tax in the form of tariffs on the goods they are importing, they pass this increased cost onto consumers in the form of higher prices.

What impact does tariffs have on international trade?

Tariffs hurt consumers because it increases the price of imported goods. Because an importer has to pay a tax in the form of tariffs on the goods they are importing, they pass this increased cost onto consumers in the form of higher prices.

How do tariffs affect terms of trade?

Tariffs increase the prices of imported goods. ... Because the price has increased, more domestic companies are willing to produce the good, so Qd moves right. This also shifts Qw left. The overall effect is a reduction in imports, increased domestic production, and higher consumer prices.