U.S. to Lift Tariffs on Ukrainian Steel

EconEye Admin

4 years ago

The Biden administration has negotiated with the EU, Britain, and Japan to ease the Trump administration’s steel tariffs, while maintaining some protections for U.S. steel makers. Now President Biden plans to lift tariffs on Ukrainian steel.—nytimes.com

Answer the following questions to check your understanding of the story.

How does a tariff on foreign steel imports affect U.S. steel makers?

With a tariff, U.S. steel makers ______________ compared to a situation of free trade.

a) receive a higher price and produce more steel

b) receive a higher price and produce less steel

c) receive a lower price and produce more steel

d) receive a lower price and produce less steel

Is a tariff subtracted from or added to the world price? How do producers respond to a change in price?

With a tariff, the price received by U.S. steel makers rises to the world price plus the tariff. And with a higher price, U.S. steel makers produce more steel.

Who gains from lower tariffs on U.S. steel imports?

a) U.S. steel consumers and steelmakers gain.

b) U.S. steel makers gain.

c) U.S. steel consumers gain.

d) Only foreign steel exporters gain.

How do lower tariffs on steel change the price of steel, the quantity bought, and the quantity produced by U.S. steel makers? Who gains?

When the tariff is lowered, U.S. consumers gain because they pay a lower price and buy more steel.

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