To improve their own local manufacturing, many developing nations put higher tariffs or duties on imported items. This practice has it’s own advantages and disadvantages which are been discussed in below paragraphs.
The prime reason for such practice is to aid the local economy and provide a safe environment for the small and native manufacturing units. Since imposing higher duties on imported items causes it’s prices to surge. Owing to that, common people hesitate to buy imported stuff and instead prefer to go with local products. For example, initially after getting freedom from Britishers, India imposed a huge taxation on import and kept it’s market close for the world. As a result, India’s steel production units flourished. Additionally, it also gave space for local and small businesses to thrive as there were no outsider competition.
Furthermore, by keeping the duties high on imports, nations can balance their trade deficits. Because, this trade deficits are been balanced, countries can take their own stands on different global issues without being under pressure. For example, some small countris of southern asia fell under influence of China as they were highly reliant on chinese imports; consequently, losing their voices on global issues and are pressurised to support Chinese intentions.
On the other hand, there are few setbacks to this practice. Due to lack of competition the quality of the produce is sometimes hampered. Not only poor quality of items, but also the inflated prices and poor innovation causes troubles for the countries.
In conclusion, I strongly agree with the fact that there are some minor drawbacks of imposing duties such as poor produces and unregulated prices; however, there are significant benefits of the practice such as boosted economy and adequate political freedom on global problems.