THE IMPACT OF TARIFF RATES ON SMALL AND LARGE ECONOMIES

Abstract

In today's globalized economy, the imposition of tariff rates has become a contentious issue with significant implications for both small and large economies. Tariffs are taxes placed on imported goods, designed to protect domestic industries and jobs. While they can provide short-term benefits for certain industries, they often lead to retaliatory measures by trading partners, resulting in an overall reduction in global trade. Small economies are particularly vulnerable to the negative effects of tariffs, as they rely heavily on international trade and lack the resources to withstand prolonged trade disputes. On the other hand, large economies may have more leverage in trade negotiations but can still suffer from disruptions in supply chains and increased costs for consumers. Understanding the impact of tariff rates on both types of economies is crucial for developing effective trade policies that promote economic growth and stability.