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Tours of china for Some countries also imposed export tariffs, particularly on minerals like gold, silver, or copper, because exporters could pass on most of the cost of the tariff to foreign buyers, and because mining companies, unlike manufacturing firms, could not relocate to other countries to avoid the tariff. Import tariffs raise the price of imported goods relative to local products, and so have two effects: 1) consumers buy more local goods, and 2) the price of local goods rises. Both help local producers thrive, especially if their factories have economies of scale. For instance, in auto plants, producing a larger number of cars allows the cost of expensive machinery to be spread out over total output so each car can be sold at lower cost. Most trade economists emphasize the parts of FREE TRADE theory that say, under certain assumptions, if a small country imposes a tariff it reduces the well-being tariff 825 of its population. Consumers lose by paying higher prices; producers gain by selling at higher prices; and the government gains tariff revenue. However, under certain assumptions it can be proven that the gains by producers and the government are not enough to fully offset consumers’ losses. Tours of china 2016.

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