Tariff

1
Tariff

• What is it? (The 3 Rs)

• Usually levied as a percentage of the declared
  value of the good, similar to a sales tax
• Unlike sales tax, tariff rates are often
  different for every good and tariffs do not apply
  to domestically produced goods.

2
Article On Tariffs

• World Bank estimates that if all barriers to
  trade such as tariffs were eliminated, the global
  economy would expand by 830 billion dollars by
  2015.
• Tariffs hurt the country imposing them and the
  country imposed on.
• 2000 President Bush raised tariffs on imported
  steel goods.
• If tariffs are bad for the economy, why do we
  have them?

3
Definitions Needing to Know

• Harmonized Tariff System- Importers and
  exporters have to determine the correct
  classification number for a given product that
  will cross borders
• Effect on imports and exports People who work
  with this must familiarize themselves with the
  different classifications and use them accurately
• Product classification example

4
Definitions Needing to Know

• Nontariff trade barrier any measure other than
  a tariff that is a deterrent of obstacle to the
  sale of products in a foreign market.
• Quota government-imposed limit or restriction
  on the number of units that can be imported.
• The U.S. has over 8,000 different tariff
  classifications.
• United States engages in managed trade.
• Ukraine wool coat example.

5
Definitions Needing to Know

• Restrictive administrative and technical
  regulations Take form of antidumping
  regulations, size regulations, and safety and
  health regulations
• Effects Volkswagon.

6
Tariff Systems

• Provide either a single rate of duty for each
  item applicable to all countries or two or more
  rates, applicable to different countries or
  groups of countries.
• Single column tariff a schedule of duties in
  which the rate applies to imports from all
  countries on the same basis.
• Two-column tariff General duties plus special
  duties indicating reduced rates determined by
  negotiations.

7
Tariff Systems

• Normal Trade Relations
• Agreed upon by convention.
• Nations agree to apply their most favorable
  tariff or lowest tariff rate to all nations.
• U.S. and NTR
• Does not give NTR to North Korea, Iran, Cuba,
  and Libya.