Tariffs

Extracted Attributes

• Types

  Fixed (constant sum per unit or percentage of price), variable (amount varies by price), ad valorem (fixed percentage of value), specific (fixed amount per good), and tariff-rate quotas (tariffs kick in or rise after a certain import amount).

• Definition

  A duty or tax imposed by a national government, customs territory, or supranational union on imports of goods, paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials, paid by the exporter.

• Economic Impact

  Raise prices of imported goods, discourage consumption of foreign products, increase input costs for businesses, harm domestic exporters, and can be regressive, disproportionately affecting lower and middle-income households.

• Primary Purpose

  Generate government revenue, protect domestic industries, correct trade imbalances, and serve as a political tool for negotiations.

• Economic Consensus

  Near unanimous consensus among economists that tariffs are self-defeating and have a negative effect on economic growth and economic welfare, while free trade is beneficial.

• Payment Responsibility

  Importer (for import tariffs) or Exporter (for export tariffs).

• Historical Justifications

  Protect infant industries, allow import substitution industrialisation, and rectify artificially low prices (due to dumping, export subsidies, or currency manipulation).

Timeline

• US sugar producers began to be protected by tariffs. (Source: Web search results)

  1789-01-01

• The US auto industry began to benefit from the 'chicken tax', which placed 25 percent tariffs on some pickup trucks. (Source: Web search results)

  1964-01-01

• Tariffs on countries such as Vietnam are proposed as a policy measure within the 'Big Beautiful Bill' to counter a debt crisis and achieve a '3-3-3 Economic Goal'. (Source: related_documents)

  2024-XX-XX

• President Donald Trump continues to advocate for and wield tariffs to achieve goals such as stopping drug trafficking, competing with China, and reducing the U.S. trade deficit. (Source: Web search results)

  2024-XX-XX

Tariff

A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is paid by the exporter. Besides being a source of revenue, import duties can also be a form of regulation of foreign trade and policy that burden foreign products to encourage or safeguard domestic industry. Protective tariffs are among the most widely used instruments of protectionism, along with import quotas and export quotas and other non-tariff barriers to trade. Tariffs can be fixed (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies according to the price). Tariffs on imports are designed to raise the price of imported goods to discourage consumption. The intention is for citizens to buy local products instead, which, according to supporters, would stimulate their country's economy. Tariffs therefore provide an incentive to develop production and replace imports with domestic products. Tariffs are meant to reduce pressure from foreign competition and, according to supporters, would help reduce the trade deficit. They have historically been justified as a means to protect infant industries and to allow import substitution industrialisation (industrializing a nation by replacing imported goods with domestic production). Tariffs may also be used to rectify artificially low prices for certain imported goods, due to dumping, export subsidies or currency manipulation. The effect is to raise the price of the goods in the destination country. There is near unanimous consensus among economists that tariffs are self-defeating and have a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth. American economist Milton Friedman said of tariffs: "We call a tariff a protective measure. It does protect . . . It protects the consumer against low prices." Although trade liberalisation can sometimes result in unequally distributed losses and gains, and can, in the short run, cause economic dislocation of workers in import-competing sectors, the advantages of free trade are lowering costs of goods for both producers and consumers. The economic burden of tariffs falls on the importer, the exporter, and the consumer. Often intended to protect specific industries, tariffs can end up backfiring and harming the industries they were intended to protect through rising input costs and retaliatory tariffs. Import tariffs can also harm domestic exporters by disrupting their supply chains and raising their input costs.

Web Search Results

• What Are Tariffs? | Council on Foreign Relations

  Tariffs are a form of tax applied on imports from other countries. Economists say the costs are largely passed on to consumers. Countries have used them to protect domestic industries, such as agriculture and renewable energy, as well as to retaliate against other states’ unfair trade practices. In his second term, President Trump is again wielding tariffs in pursuit of goals such as stopping drug trafficking, competing with China, and reducing the U.S. trade deficit. [...] A tariff is a tax imposed on foreign-made goods, paid by the importing business to its home country’s government. The most common kind of tariffs are ad valorem, which are levied as a fixed percentage of the value of the imports. There are also “specific tariffs,” which are charged as a fixed amount on each imported good (for example, $2 per shirt) and “tariff-rate quotas,” which are tariffs that kick in or rise significantly after a certain amount of imports is reached (e.g., fifty thousand [...] Tariffs in most cases are intended to protect local industries by making imports more expensive and driving consumers to domestic producers. In the United States, several politically sensitive industries benefit from such tariffs: sugar producers have been protected by tariffs since 1789—two years after the signing of the U.S. constitution—and the auto industry has benefited from the so-called chicken tax since 1964, which places 25 percent tariffs on some pickup trucks. Additionally, tariffs

• Tariffs 101: What are they and how do they work? - Oxford Economics

  Tariffs are taxes imposed by a government on goods and services imported from other countries. Think of tariff like an extra cost added to foreign products when they enter the country. They’re usually a percentage of the price of the goods. The level of the tariff will affect the significance of its impacts. Why do governments impose tariffs: [...] Raise government revenue– tariffs serve as a source of income for governments. Protect domestic industries and correct trade imbalances– tariffs shelter domestic industries from foreign competition and discourage consumption of imported goods. Political tool for negotiations– tariffs can be used to apply pressure on the foreign government they are imposed on, as part of a trade negotiation or a political tool.

• Tariff - Wikipedia

  Tariffs can be fixed (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies according to the price). Tariffs on imports are designed to raise the price of imported goods to discourage consumption. The intention is for citizens to buy local products instead, which, according to supporters, would stimulate their country's economy. Tariffs therefore provide an incentive to develop production and replace imports with domestic products. Tariffs are [...] meant to reduce pressure from foreign competition and, according to supporters, would help reduce the trade deficit. They have historically been justified as a means to protect infant industries and to allow import substitution industrialisation (industrializing a nation by replacing imported goods with domestic production). Tariffs may also be used to rectify artificially low prices for certain imported goods, due to dumping "Dumping (pricing policy)"), export subsidies or currency [...] A tariff is called an optimal tariff if it is set to maximise the welfare of the country imposing the tariff.( It is a tariff derived from the intersection between the _trade indifference curve_ of that country and the offer curve of another country. In this case, the welfare of the other country grows worse simultaneously, thus the policy is a kind of _beggar thy neighbor policy_. If the offer curve of the other country is a line "Line (geometry)") through the origin point, the original

• Tariffs Definition | TaxEDU Glossary - Tax Foundation

  Tariffs are taxes imposed by one country on goods imported from another country. Tariffs are trade barriers that raise prices, reduce available quantities of goods and services for US businesses and consumers, and create an economic burden on foreign exporters. ## How Do Tariffs Function? [...] Tariffs are paid when a good or services is imported into a country. If a car manufacturer imports engines that are then used in vehicles, then tariffs on those imported engines will increase the production cost and the cost to the consumer. The costs of tariffs result in higher burdens on international trade which can harm production. Many businesses have supply chains that cross multiple borders, and each border that is crossed could result in higher costs due to tariffs. [...] Tariffs ultimately fall on the factors of production and reduce taxpayer labor and capital income. This occurs either by raising prices or reducing wage and capital income. Tariffs tend to be regressive because the average shares of income sources burdened by tariffs are higher for lower-income taxpayers. Analysis of imposed and threatened US tariffs (as of December 2018) shows that lower and middle-income households experience relatively larger drops in after-tax income.

• Import Tariffs & Fees Overview and Resources

  Customs Info User Guide (and video). Use Customs Info Database tariff and taxes look-up tool for finding duties and taxes for shipments to over 170 markets. A tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs applied on different products by different countries. [...] European Union Tariffs (TARIC)(use tariff rates listed for exports to 27 EU member countries. FTA Tariff Tool(Incorporates all products, including agricultural and non-agricultural goods). WTO Tariff Database:tariffdata.wto.org/(use the “Applied Rates”). List of duty rates of World Trade Organization member countries). Requires registration. [...] The first step in determining duty rates (otherwise known as tariff rates) is to identify the Harmonized System (HS) code for your product(s). Once you know your product’s Harmonized System (HS) code, you will be closer to determining the applicable tariff and tax rates for a specific foreign country.