If tariffs cause net welfare losses, why are they so common in developing countries -benefits of policies are concentrated among rel. small # of people and costs spread among rel. large # people, Long history of protection in the agriculture industry.
Tariffs affect the trade, production, consumption, and well-being of trading partners as well as the country that imposes them. They do this through both the absolute level of protection they afford and the strains associated with their structure.
This will increase the prices of tariffs on imported goods and create a domestic market for domestically produced goods, while also preventing these industries from being squeezed out by more competitive prices.
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