Governments often implement tariffs on imported goods for a variety of reasons. These reasons can be broadly categorized as protecting domestic industries, generating revenue, and addressing unfair trade practices.

Protecting Domestic Industries: Tariffs increase the price of imported goods, making them less competitive with domestically produced goods. This can help to protect domestic producers from foreign competition, allowing them to maintain market share and potentially avoid closure. This is particularly relevant for industries considered strategically important for national security or economic stability.

Generating Revenue: Tariffs are a source of revenue for the government. The revenue generated can be used to fund public services or reduce other taxes. This is a direct financial benefit to the government.

Addressing Unfair Trade Practices: Tariffs can be used as a response to unfair trade practices by other countries, such as dumping (selling goods below their cost of production) or subsidies (government support for domestic producers). A tariff can level the playing field and make foreign goods more competitive.

Advantages to Domestic Producers:

• Increased market share due to reduced foreign competition.
• Higher prices for their goods, leading to increased profits.
• Job protection within the domestic industry.

Disadvantages to Domestic Producers:

• May lead to complacency and reduced innovation due to lack of competitive pressure.
• Can result in retaliation from other countries, leading to trade wars.
• May increase costs for businesses that rely on imported components.

Advantages to Consumers:

• Potentially lower prices for domestically produced goods.

Disadvantages to Consumers:

• Higher prices for imported goods.
• Reduced choice of goods available.
• Higher overall cost of living if tariffs are widely applied.

It's important to note that the effects of tariffs are complex and can be debated. While they can benefit domestic producers in the short term, they can also have negative consequences for consumers and the overall economy.

Here's a table outlining the potential advantages and disadvantages for a business that imports raw materials under import tariffs and quotas:

The specific advantages and disadvantages will depend on the level of the tariff or quota, the availability of alternative suppliers, and the business's overall strategy.

Improved transport links have been a crucial driver of globalisation because they reduce the cost and time associated with moving goods and people across international borders. Historically, high transportation costs limited trade to nearby regions. However, advancements like container ships, airplanes, and efficient road and rail networks have dramatically changed this.

Examples include:

• Containerisation: Standardised containers allow goods to be easily transferred between ships, trains, and trucks, reducing handling time and costs. This has facilitated the growth of just-in-time inventory systems.
• Air freight: Essential for time-sensitive goods like electronics and pharmaceuticals, air freight enables faster delivery and access to global markets.
• Improved road and rail networks: These networks facilitate the movement of goods within countries and to neighbouring nations, supporting regional and international trade.
• Reduced shipping costs: Economies of scale in shipping have led to significantly lower per-unit costs, making international trade more profitable.

Without these improvements, globalisation would be far less extensive. The ability to efficiently move goods has fostered international supply chains, increased competition, and facilitated the growth of multinational corporations.