Tariffs have become an indispensable part of the global economy. It is reported that developing nations should be spurred to introduce and adopt high tariffs to bolster their domestic industries. While such a policy might offer short-term benefits, I adamantly disagree with this proposal for several reasons.
On the one hand, high tariff implementation is beneficial to some extent. Unlike developed countries, such as the U.S and China–leading countries in the global economy–underdeveloped states are taken advantage of by foreign organizations. Since nations struggle with a yet-to-develop market, the dominance of both local monopolies and foreign enterprises takes a toll on the market. For example, an artificial rise in prices can be a clear outcome. In this respect, hardly ever do state officials ensure transparent and ethical trade without high tariffs. If governing bodies implement such a policy, the domestic market might benefit, promoting fair practices that benefit the local market . Uzbekistan is a case in point, a country that levied taxes and high tariffs on foreign products, mainly on car manufacturers, to eliminate artificial price rise. No sooner had the government enacted high tariffs than local producers, such as General Motors, began to experience a level playing field.
However, I still disagree with the proposed statement. I believe that while high tariffs contribute to transparent and ethical trade in emerging markets, they infringe on the domestic economy. High tariffs eliminate variation of goods in local markets. The more taxes are levied on foreign goods, the more it becomes difficult to fill the needs of ever-growing consumer demand. This can be seen in the example of developed countries–the U.S and China–countries that introduced up to 145% and 125% respectively on foreign products. This has instilled fear in politicians and economists, who state that prices may go up, posing burdens on citizens’ budgets. Even developed countries struggle with tariffs, let alone underdeveloped countries.
It is true that local companies benefit. Yet, if the economy and market were not to be developed completely, the production of fruit or technology might be halted because of tariffs. Precisely,seeking variation is second nature to humans. Unless the local markets offer different options, they cannot grow. This, in turn, fuels brain drain, a phenomenon in which skilled individuals migrate to other developed countries in search of better living settings, posing burdens on local economies which rely highly on such well-versed individuals to grow a plethora of industries. I, therefore, believe that developing countries should not introduce high tariffs.
In conclusion, I maintain that developing countries should avert imposing high tariffs. While this helps eliminate monopolies of leading local and foreign companies, brain drain and a rise in prices are clear outcomes, harming the local markets.