INDIA's now is the biggest as per the human resources and is rival to China and part of China plus 1 policy and more open and a democracy which is not one way, the US, too, wants to export more oil and food to INDIA, pitching with INDIA... US could be a reliable partner to INDIA in the long run, INDIA too needs to strengthen its security, though Security Council seat to counter China... INDIA and US may try to settle trade in their respective countries with each other, to equalise the exchange rate or in a block with two or more countries, but it is useful to think of a currency or currencies that could facilitate US dollar getting cheap and make us exports competitive,,, which creates a lot of uncertainty fo the US too..."
Lowering tariffs, or taxes on imported goods, can
increase trade by making imported goods cheaper and more accessible, boosting
demand and encouraging businesses to engage in international trade.
Here's a more detailed explanation:
Reduced Costs:
Lowering tariffs reduces the cost of imported goods,
making them more competitive and attractive to consumers and businesses.
Increased Demand:
Cheaper imports can lead to increased demand, both
domestically and internationally, as consumers and businesses seek out lower
prices.
Expanded Market Access:
Lower tariffs can open up new markets for exporters,
as they can now compete more effectively in countries with lower tariff
barriers.
Global Supply Chain Integration:
Lowering tariffs can facilitate global supply chains,
as countries can access a wider range of inputs and components at lower costs,
leading to increased production and trade.
Economic Growth:
Increased trade can lead to economic growth by
boosting productivity, creating jobs, and fostering innovation.
Consumer Benefits:
Lower tariffs can lead to lower prices for consumers,
increasing their purchasing power and improving their standard of living.
Business Benefits:
Lower tariffs can lead to increased profits for
businesses, as they can sell more goods and services at lower prices.
Example:
A country that lowers its import tariffs on
intermediate inputs may lead to lower production costs, thereby increasing its
exports of final goods.
In the long run, import tariffs can lead to reduced
efficiency, higher prices for consumers, and potentially a decline in overall
economic growth, as they distort trade patterns and reduce competition.
Here's a more detailed explanation:
Reduced Efficiency and Innovation:
Tariffs can make domestic industries less efficient
and innovative by shielding them from competition from cheaper imports. This
can lead to a decline in overall productivity and economic growth.
Higher Prices for Consumers:
Tariffs increase the cost of imported goods, which can
lead to higher prices for consumers. This can reduce consumer welfare and
purchasing power.
Distorted Trade Patterns:
Tariffs can lead to a shift in trade patterns, as
countries may seek alternative suppliers or reduce their exports to countries
with tariffs. This can disrupt global supply chains and lead to economic
instability.
Potential for Trade Wars:
Tariffs can trigger retaliatory measures from other
countries, leading to trade wars that can have significant negative economic
consequences.
Impact on Developing Countries:
Tariffs can hinder the economic development of
developing countries by limiting their access to international markets and
increasing the cost of imported goods.
Regressive Impact:
Tariffs often have a regressive impact,
disproportionately affecting lower-income consumers who spend a larger portion
of their income on basic necessities.
Impact on Small Businesses:
Small businesses, particularly those relying on
imported materials, face significant challenges due to increased costs.
Real Exchange Rate Appreciation:
Tariffs can lead to an appreciation of the real exchange rate, which can hamper competitiveness and undermine potential improvements in the trade balance.