The UK's legislative target of reaching net-zero greenhouse gas emissions by 2050 has placed trade policy at the heart of environmental strategy. To lower the capital cost of decarbonisation, policymakers are debating the unilateral removal of import tariffs on solar photovoltaic (PV) cells. Currently, these components face border tariffs designed to protect a nascent domestic clean-tech assembly sector. (5)
Industry analysts suggest that removing these tariffs will significantly lower prices for solar installers, driving a surge in imported components. However, domestic solar assembly firms warn that without tariff protection, they will struggle to compete against large-scale, low-cost international manufacturers, risking domestic job losses in the green energy sector. (10)
Extract C (lines 6–7) states: 'Industry analysts suggest that removing these tariffs will significantly lower prices for solar installers, driving a surge in imported components.'
With the help of a tariff diagram, explain the extent to which the removal of a tariff might affect the volume of imports into a country.
310 exam-style questions on AQA A Level Economics 2.6 The international economy (A-level only), covering 2.6.1 Globalisation, 2.6.2 Trade, 2.6.3 The balance of payments, 2.6.4 Exchange rate systems, and 2.6.5 Economic growth and development. Each one has a worked solution and a mark scheme showing where the marks go.