What is Tariff (Import)?
A tariff (import) is a tax or duty placed on goods when they are imported into a country. Tariffs are used to protect domestic industries from foreign competition, and to raise revenue from foreign trade.
Examples of Tariff (Import)
Tariffs can be divided into three main types:
- Ad Valorem – these are taxes based on the value of the goods imported, such as a 20% tax on imported cars.
- Specific – these are taxes that are based on the quantity of goods imported, such as a $10 tax on every ton of imported coal.
- Compound – these are taxes that are a combination of ad valorem and specific taxes, such as a $10 tax plus a 20% tax on imported cars.
Advantages and Disadvantages of Tariff (Import)
Tariffs can have both positive and negative effects on a country’s economy. On the one hand, they can protect domestic industries from foreign competition, which can help them to remain competitive. On the other hand, they can increase the cost of imported goods, which can lead to higher prices for consumers.
Conclusion
Tariffs (import) can have a significant effect on a nation’s economy, both positive and negative. It is important for governments to carefully consider the pros and cons of imposing tariffs before implementing them.
Further Reading
- Tariff Definition – Investopedia
- Tariffs: Definition, Examples, and Effects – The Balance
- Advantages and Disadvantages of Tariffs – Investopedia