Recall the Application about the impact tariffs have on lower income households to answer the following question(s). Economists have found that tariffs in the United States fall most heavily on lower-income consumers. In the United States, tariffs are very high on textiles, apparel items and footwear, and within these categories the highest tariffs fall on the cheapest products. In general, to protect U.S. industries, tariffs are highest on labor-intensive goods.
According to this Application, tariffs in the United States are very high on textiles, apparel items and footwear. These tariffs disproportionately impact lower-income households because:
◦ the tariffs are only applicable to lower-income households.
◦ lower-income households tend to purchase more of these items than do higher-income households.
◦ these products represent a higher fraction of consumption of lower-income households than higher-income households.
◦ higher-income households tend to purchase products produced in the United States, which are not subject to tariffs.
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