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Tariff and Non-Tariff

In: Business and Management

Submitted By mgnance
Words 1032
Pages 5
A Tariff can be generalized as a comprehensive tax on goods that are imported from foreign countries. The goal of a tariff is to secure the domestic product of a given nation from cheaper goods which are imported from nations that have a larger producing capacity. Tariff also helps to balance the prices in a country. Issues that may arise from tariff can be double sided. In other words, tariff has the power to bring businesses and governments down to instant financial security (Wikipedia, 2007). There are many different tariffs in which each is designed for a specific operation. The most notable tariffs are the protective tariff, the revenue tariff, and the prohibitive tariff. The protective tariff was enacted to inflate the prices set by imported products which create a positive vacuum for domestically based industries. This type of tariff places high tax on foreign imports which in turn forces a given company to raise its prices above its competitors who are based domestically. The revenue tariff is designed to generate and accumulate large amount of finances for the government. An example of such tariff would be a country that has very little product. In order to keep the domestic gains strong the government will need to install tariff on the imported goods which will levy the prices. This act by the government creates a security blanket for the limited product of certain import goods. The prohibitive tariff is the worst tariff to use in a global market today. This type of tariff is used to eradicate competition between a foreign and domestic producer as well as to stop foreign imports in its track. It is similar to an embargo that is placed on a given country. The different types of tariff mentioned above are developed in tariff barriers for foreign market officials (Wikipedia, 2007). Economical theories support that tariff barriers are a major…...

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