International Trade Policy

Producers in the United States often rely on companies in Mexico for components they need to produce their products. Mexican labor costs are lower than those in the United States. Domestic companies that have the capacity to produce those same components have asked Congress to impose tariffs on some of those imported components.

1. Who would be hurt if the tariffs were imposed? Explain in detail who is hurt and why they are hurt.
2. Who would be helped if the tariffs were imposed? Explain in detail who is helped and why they are helped.
3. Under what conditions could tariffs be justified?