How can taxes affect trade between countries?

SubjectEconomics YearSenior secondary Curriculum Time45

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In this activity, students are introduced to the concept of protection and explore the question of how taxes affect trade between countries. They assess the impact of tariffs on the market, including domestic production costs and prices, the demand and supply of imported goods and the potential effects on levels of employment and tax revenue and spending. They also consider how tariffs impact on the overall economic wellbeing of consumers, producers and businesses.

Australian Curriculum or Syllabus


  • Reasons for protection
  • Methods of protection
  • Effects of protection on the domestic economy

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Student learning resources

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How can taxes affect trade between countries?


What is the impact of tariffs on the market and economy?

Suggested activity sequence

This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.

  1. Students read the explainer. As they read, students highlight any terms they do not understand and complete the Cornell note taking template.
  2. Invite students to share the terms they are unfamiliar with and record them on the board. Ask other students to define these, clarifying misunderstandings or definitions as they do. Define any remaining terms.
  3. Students complete the worksheet and answer the questions that follow in pairs.
  4. As a class, discuss if free trade is desirable and why.