Economic Analysis of Tariffs

Abstract

This chapter’s topic is tariffs, one of the many instruments of trade policy. Tariffs used to be the most popular tool utilised by policy makers. However the multilateral negotiations success in targeting tariffs for trade liberalisation has meant that other instruments of regulating trade flows have become relatively more popular. In principle, however, economists still prefer tariffs over other trade policy instruments as tariffs are considered to be the most transparent of all tools. The effects of some of the non-tariff barriers used are studied in Chapter 9.