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The Impact of Tariff and Non-Tariff Barriers International Trade

In: Business and Management

Submitted By leowell33
Words 2364
Pages 10
ECFI 644 International Economics
Instructor: Dosse Toulaboe
By Zhenjie Song (Leo)
The Impact of Tariff and Non-Tariff Barriers International Trade
Introduction
In nowadays, tariff and non-tariff barriers have affected the trends and structure of international trade, the geographic direction, and importing and exporting countries relations (Stigler, 1971). This research paper mainly will talk about the tariff, non-tariff, and the relationship and impact of them.
Tariff
A tariff is simply a tax or duty placed on an imported good by a domestic government. Tariffs are usually levied as a percentage of the declared value of the good, similar to a sales tax. Unlike a sales tax, tariff rates are often different for every good and tariffs do not apply to domestically produced goods. Tariff could be an old and popular method of obtaining revenue from international business and economic activities. Generally, government levy tariffs for three main reasons. The first is that the tariff can protect fledgling domestic industries from foreign competition; the second is that the tariff can protect aging and inefficient domestic industries from foreign competition; the last reason is that the tariff can protect domestic producers from dumping by foreign companies or governments. Dumping occurs when a foreign company charges a price in the domestic market which is "too low". In most instances "too low" is generally understood to be a price which is lower in a foreign market than the price in the domestic market. In other instances "too low" means a price which is below cost, so the producer is losing money.
The most famous and most common tariff form is import tariff. An import tariff is a tax placed by governments on commodities that are shipped into a country from a foreign country. Import tariffs are often a way to discourage a country's consumers from buying products...

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