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Tariff on imported refrigerators

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Reference no: EM131274551

The U.S. imports steel to make cars and refrigerators. Let us assume that KX is a less developed country that exports steel to the United States, and that you are the president of KX.

Currently the U.S. imposes a 20% tariff on imported cars, a 15% tariff on imported refrigerators, and a 10% import tariff on steel. The U.S. government has decided to reduce the tariff on imported steel to 5% starting next month.

Q: An economist in Lewis argues that the U.S. is discouraging KX from undergoing industrialization. Do you support the economist's argument? Explain.

Reference no: EM131274551

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