Скачать или смотреть TARIFF Types & Why it is Imposed

A tariff is a tax or duty imposed by a government on imported or exported goods. It is used to regulate trade, protect domestic industries, and generate government revenue.

Types of Tariffs

1. Ad Valorem Tariff – A percentage of the value of the imported goods (e.g., 10% of the product’s price).


2. Specific Tariff – A fixed amount charged per unit of goods (e.g., $5 per kg).


3. Compound Tariff – A combination of both ad valorem and specific tariffs.


4. Protective Tariff – Imposed to protect domestic industries from foreign competition.


5. Revenue Tariff – Levied to generate income for the government.


6. Anti-Dumping Tariff – Imposed to counteract artificially low prices from foreign companies.


7. Retaliatory Tariff – Used in response to unfair trade practices by other countries.


8. Preferential Tariff – Lower or zero tariffs applied to certain countries as part of trade agreements.



Why Are Tariffs Imposed?

Protect Domestic Industries – Prevent local businesses from being overshadowed by cheaper foreign products.

Generate Revenue – Provide income for the government.

Control Trade Balance – Reduce trade deficits by making imports more expensive.

Retaliation Against Trade Practices – Respond to unfair policies from other countries.

Promote Local Employment – Encourage production within the country, creating jobs.


Advantages and Disadvantages for Exporters & Importers

For Exporters

Advantages:
✔️ Reduced competition in domestic markets if other countries impose reciprocal tariffs.
✔️ Governments may provide subsidies to counter tariff impacts.

Disadvantages:
❌ Higher tariffs in foreign markets make exports less competitive.
❌ Risk of trade wars reducing overall market access.

For Importers

Advantages:
✔️ Protection of local businesses from cheap foreign products.
✔️ Encouragement of domestic production and self-sufficiency.

Disadvantages:
❌ Higher costs for imported goods.
❌ Limited variety and quality of products available.
❌ Inflation due to increased costs of goods.