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16 November, 08:38

How did tariffs affected American merchants?

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  1. 16 November, 09:13
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    It is not mentioned in the question which country sets the tariffs. There would be two possibilities (the American goverment sets the tariffs in the US border, or foreign countries set tariffs in their territory that affect products which come from other coutries like the US). I understand that in this case you refer to the latter option, as it is the one which produces a more direct impact on American merchants.

    If foreign countries set tariffs in their frontiers to protect their national producers, in case American merchants want to commercialize their products there, these products will not compete in equal conditions anymore with the ones manufactured in the country of destination.

    The American producers see how their costs of production have been increased, and the market price of their goods will be forced to increase over the price they would have had if there were no tariffs. The potential of American firms to compete in prices with national producers is much lower, and they will possibly lose customers in the foreign market and hence, decrease their sales.
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