The United States uses tariffs and quotas to restrict trade with foreign countries. This is imperative to control foreign imports and the impact they have on our economy. All countries produce goods that are available on the open market, such as automobiles, lumber, consumer electronics etc. The United States has a manufacturing base that is shrinking because of competition from other countries. In order to slow the progression of this decline we place tariffs on countries that produce products that we sell at home. Being one of the world’s most financially affluent countries we create a large market for goods, especially cheap goods that are mostly produced in countries that have much lower working condition standards than the United States. This gives the importing country an edge in the profit margin by way of the lower cost of production. In order to maintain equilibrium in the world market we impose tariffs and quotas. The benefit to the domestic producer is one that in many cases keeps the manufacturing base viable in the U.S., but this advantage predominantly effects the larger corporations that are beginning to take over much of the market, while the inflated prices and increase in jobs does not end up in the mutual pockets of the workers, but rather concentrates to the top. In many ways this is counterproductive because if the U.S. were to lose a manufacturing industry, the jobs it creates that do not tend to produce a majority of good paying jobs, could be balanced by the American consumer paying considerably less for goods. It is a difficult balancing act with many possible political, economic, and social issues. I am a strong believer in foreign trade and American industry as long as there is a close eye being paid to both.

The strength of the dollar on domestic and foreign economies differs in each economy, in domestic the domestic economy; the dollar may not have as much value as in foreign economies. The exchange rates in foreign countries differ; therefore, the U.S. Dollar may be more or less depending on which foreign economy is in question. There are many benefits that placing tariffs on international trade has on the economy. The tariffs actually increases the domestic selling price; therefore, allowing the sellers or producers of the products to earn more of a profit on those goods, because the demand has decreased. Because the demand for so many products decreases, the prices increase allowing larger profits, and opportunities to create other products. On the other had those tariffs also cause loses. Although the domestic producers are better off, and the government raises much needed revenue, the losses that consumer’s experience far exceed the benefits that the government and domestic producers receive. While the domestic suppliers are enjoying a huge profit, the domestic buyers are forced to purchase goods that have increased in price because of these tariffs that have been placed on these goods. Tariffs can also affect the number of goods a consumer can actually purchase. In terms of quotas, a quota is similar to tariffs. Quotas raise the prices that are set for a particular good, restrict trade within countries, and can cause losses in profit. Although, there are some benefits, and also some great losses associated with foreign trade, many economists ensure consumers that free trade is what is best for the country and the economy.

A tariff is usually a tax that one country sets on the imported goods or services of another nation. A quota is a trade restriction set by a country to maintain and secure the country’s interests by limiting the amount of goods that can be imported into the country for a fixed time period. The tariffs and quotas in the United States were established to control the amount of goods that enter into the United States to protect the United States interests economically while still maintaining the healthy trading relationship with other countries. The United States utilize