Developing countries should be encouraged to implement high tariffs to grow their local industries. To what extent do you agree or disagree? ielts essay
In recent years, imposing high tariffs on imported goods and services has become a common suggestion for underdeveloped nations, to protect the domestic industries. While this arrangement seems feasible, governments must act prudently to circumvent its adverse impact.
To start with, economists assert that levying high tariffs can help the infant factories survive in a competitive world; they lack capital, raw material, cheap labour and a proper scale to do the business. Likewise, it also encourages customers to buy local products; products, sourced from other parts of the world, will become more expensive, resulting in building home-grown brands. For example, India levied tariffs on automotive a few years ago, precipitating setting up its own manufacturing unit of Hyundai and Maruti, now the top selling brands for vehicles. In addition, it also generates employment opportunities, boosting the economy of the country.
Nevertheless, the skepticals term it as a recipe for disaster; other countries will also retaliate by deploying similar charges, leading to trade wars and strained international relations. For example, USA and Canada tariffs attack is one example of retaliation, where both countries ended up putting their own taxes, resulting in a downfall of imports, and promoting international tensions. Apart from that, if local businesses are always protected by this approach, they may lose motivation to do better, provide excellent quality, and to innovate. Also, there are more chances to increase the prices of local products due to lack of variety.
In hindsight, I think there is nothing bad in imposing levies on merchandise, brought from other nations, to protect native companies as it can help eradicate unemployment and bring wealth to the country, but regimes should be cautious while applying such a policy as it might adversely impact the financial growth in the long run.
