When an import tariff is enacted, which two groups are typically negatively impacted?

• A. Foreign producers and domestic producers
• B. Domestic consumers and the government
• C. Domestic consumers and foreign producers
• D. Domestic producers and the government

Answer: (C)

Verified step by step guidance

1. Step 1: Understand what an import tariff is — it is a tax imposed on imported goods, making them more expensive in the domestic market.
2. Step 2: Analyze the effect on domestic consumers — since imported goods become more expensive due to the tariff, domestic consumers face higher prices and reduced choices, which negatively impacts them.
3. Step 3: Analyze the effect on foreign producers — the tariff raises the cost of their goods in the domestic market, reducing their competitiveness and sales, which negatively impacts them.
4. Step 4: Consider the effect on domestic producers — tariffs can protect domestic producers by making imported goods more expensive, potentially benefiting domestic producers rather than harming them.
5. Step 5: Consider the effect on the government — the government collects tariff revenue, so it is typically not negatively impacted by the tariff.