Tariffs raise government revenue and producer earnings via higher prices

Steps:

• Tariffs function as taxes on imported goods, collected by the importing government from importers.
• This collection directly boosts the US government's tariff revenue and overall income.
• The tariff shifts the supply curve upward, increasing the domestic price of steel.
• Higher prices enable Chinese producers to receive elevated payments per unit exported, increasing their income if sales volume holds sufficiently.

Why C is correct:

• By definition, tariffs generate revenue for the government (as import taxes) and elevate market prices, allowing foreign exporters to capture higher surplus per unit under supply-demand equilibrium.

Why the others are wrong:

• A: Overlooks the direct tariff revenue gained by the US government.
• B: Ignores how price increases let Chinese producers earn more per exported unit.
• D: Dismisses both the government's revenue gain and producers' price-driven income rise.

Final answer: C