Tariff and Non-Tariff

Tariff is a specific kind of tax. It is usually move on imported goods and each country has separate tax laws. Tariff is ace of the oldest trade policies in effect (Hill, 2004). there ar five main types of tariffs; specific, ad valorem, revenue, prohibitive, and protective. A specific tariff is imposed as a fixed press per unit of imports. For instance, if a specific tax of 50 cents were employ to a handbag then the government would receive 50 cents from every handbag coming into the United States regardless the value of a Hérme handbag that cost $2000 or a Wal-mart handbag that cost $20. An ad valorem tax is applied at a fixed percentage of the value of the import. Therefore, if there were a two percents tax imposed against the handbags then $40 would be gained in tariff revenue on each $2000 Hérme handbag and only 40 cents on the $20 Wal-mart handbag. Sometimes, a specific and ad valorem tariff is imposed on the analogous product at once (Saranovic, 1997-2008). Revenue tariffs are related to to government funds. An example of a revenue tariff is a product which is not made or grown in a country; however, the country creates a tariff on the specific product so the government would make notes from the descent importing that product.

A prohibitive tariff is one that is such as high cost that it keeps the item from existence imported (Cyprus, 2008). A protective tariff is aim to artificially inflate prices of imports and protect domestic industries from foreign competition. Protective tariffs are placed on local goods and are believed to be steadying for the local economy; however, this backfire in some cases and the business has to charge more. For example, gas prices become high the airline assiduity has to pay more for gas, so they have to charge the consumers a higher price on the airline ticket in order to see a profit. Eventually, the consumer pays more because of the tariff on gas, not because of any tariff on the tickets (Cyprus, 2008). Nontariff barriers are... If you want to contribute a full essay, order it on our website: Ordercustompaper.com

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