Both quotas and protective tariffs ultimately raise the price of imported goods. Why might some argue for the creation of tariffs over the use of quotas?

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Draven Pugh

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28 August, 19:39

Both quotas and protective tariffs ultimately raise the price of imported goods. Why might some argue for the creation of tariffs over the use of quotas?

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Iliana Huynh · Answer 1

Some argue for the creation of tariffs over the use of quota because tariffs can generate revenue which is not the case for the quota system. This is revenue that would be lost to the government unless their import quota system charged a licensing fee on importers. Moreover quotas are likely to encourage corruption and smuggling of goods to the country.