Several years ago, the United States put tariffs on auto tires manufactured in C

Question

Several years ago, the United States put tariffs on auto tires manufactured in China and imported into the United States. The tariffs were put into place to help United States tire manufacturers and to maintain employment in our domestic industry. Within several months of the imposition of the tariffs, we noticed that:

A. Many jobs in the U.S. tire industry were saved; overall employment in our country increased and the overall standard of living rose.

B. United States consumers didn't buy any more U.S. tires, but they did not purchase Chinese tires due to their much higher price. Prices of United States tires decreased compared to the period before the tariffs were imposed and overall inflation in our country fell.

C. China retaliated and increased tariffs on several products it buys from the United States. As a result, our exports in those industries decreased and possible job gains in the U.S. tire industry were offset by job losses in the affected export industries. Overall, no jobs were gained and consumer prices increased.

D. tires in the United States improved in quality; this led to greater production and consumption of U.S. tires. Because exports of U.S. tires were positively affected it also lead to a decrease in our trade deficit.

Explanation / Answer

A. Many jobs in the U.S. tire industry were saved; overall employment in our country increased and the overall standard of living rose.

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