Which statement best reflects a commonly cited disadvantage of tariffs?

Which statement best reflects a commonly cited disadvantage of tariffs?

• A. Lower consumer prices
• B. Improved foreign competition
• C. Higher consumer prices
• D. Increased exports

Answer: (C)

Tariffs work by imposing taxes on imported goods, which raises their price in the domestic market. That higher price often passes through to consumers, boosting overall prices and reducing purchasing power. This is the common disadvantage economists highlight: higher consumer prices can hurt households and raise costs for businesses that rely on imported inputs. While tariffs may protect certain domestic industries, the impact most often emphasized is the squeeze on consumers. The other described effects don’t fit this downside: tariffs don’t typically lower consumer prices, they don’t inherently improve foreign competition, and they don’t generally increase exports (and can even reduce them).

Tariffs work by imposing taxes on imported goods, which raises their price in the domestic market. That higher price often passes through to consumers, boosting overall prices and reducing purchasing power. This is the common disadvantage economists highlight: higher consumer prices can hurt households and raise costs for businesses that rely on imported inputs. While tariffs may protect certain domestic industries, the impact most often emphasized is the squeeze on consumers. The other described effects don’t fit this downside: tariffs don’t typically lower consumer prices, they don’t inherently improve foreign competition, and they don’t generally increase exports (and can even reduce them).