Protectionism Blog
Thailand has high tariffs placed on imported vehicles. This tariff is at 80% under the claim that it is needed to help Thailand's economy (Phoonphongphiphat ) . This tariff could have effects on many different people as is illustrated in the diagram below. Figure 1: Tariff on imported automobiles As shown in the diagram above, before the tariff the price of automobiles is S(world). After the tariff the price rises to S(world + Tariff). Before the tariff the quanitity demanded was at Q2, but Thai producers only produced Q1 of that amount giving them a revenue of E. After the tariff they increase production to Q3 which is the new equilibrium causing their revenue to rise to E + F + A + B. Foreign producers of automobiles will be producing the rest which is the distance from Q3 to Q4, which is less than it was before. Their reven...