Tariffs and Trade

he COVID-19 pandemic has brought plenty of changes in our lives. Social distancing, staying indoors, virtual seminars, workshops, etc. are the new normal. Likewise, the pandemic has also brought significant changes in the policies of states. Many states have reduced/removed their tariffs to foster free trade to meet the demand of their citizens as domestic industries were shut because of the threat of the disease.

Nepal also followed suit and imposed a lockdown throughout the country. To meet the medical needs of the citizens, the government removed all tariffs imposed on medical equipment. Nepalese people are now able to access medical products such as masks, gloves, etc. at a cheap price.

Let me illustrate the above phenomenon using a simple demand and supply graph for masks. Continue reading…