National Evaluation Series (NES) Business Studies Practice Test

Why would Japan likely place a tariff on imports of rice produced in the US?

1. To increase the quantity of imports

2. To protect domestic rice growers from competition

3. To lower the price of imported rice

4. To promote international trade relations

The correct answer is: To protect domestic rice growers from competition

Japan is likely to place a tariff on imports of rice produced in the US primarily to protect its domestic rice growers from competition. A tariff is a tax imposed on imported goods, and when applied to rice imports, it raises the cost of foreign rice in the Japanese market. This makes domestically produced rice more competitively priced, allowing local farmers to maintain their market share and profitability. By imposing a tariff, the Japanese government can shield its domestic agricultural sector from the potentially lower prices and higher supply levels of imported rice, which could undermine local rice producers. This protective measure aims to ensure food security and preserve the livelihoods of local farmers, who are often considered important stakeholders in Japan's economy and culture. Protecting domestic industries through tariffs is a common practice in many countries, especially in sectors like agriculture where local production could be threatened by cheaper foreign imports.