Special Offer
By Category
By Alphabet
Search
Definition

What is Tariff

Tariff
Everyone on this planet consciously or unconsciously wants more than they already have. People work hard to achieve their dreams and later develop new dreams after accomplishing the older ones. But everything comes with a price tag. Growth is not always easy. Small businesses cannot survive due to branded products in the markets. To protect such people and also to reduce such imports, the tariff is imposed by the government.

What is a Tariff?

A tariff refers to the tax imposed by the government on imported goods from other countries. Tariff is imposed majorly to protect the domestic producers, but the government also imposes tariffs to reduce imports from other countries, thereby promoting the use of domestic products.

Types of Tariff
Tariffs can be specific or ad valorem. The government wants to raise awareness of domestic goods, and therefore when tax or tariff on imported goods is unit-based, it is a specific tariff. On the other hand, when the tariff is based on a certain percentage of the imported value, it is termed an ad valorem tariff.

History of Tariff
In ancient times, the government collected taxes on imports as a means of revenue. A name was not necessarily given to those taxes collected. It was only in 1789 that The Tariff Act of 1789 was signed into law by George Washington, the president of The United States of America, on July 4, 1789, and was passed by the first Congress.

In the pre-modern times, cross-border trade sounded suspicious, and countries preferred to occupy lands in the form of colonies rather than trading directly. After occupying those colonies, high tariffs were imposed on such colonies, and trade barriers were placed to make sure that the colonies dealt with the colonizer only. This way of trading is called mercantilism, where colonizing countries used to establish their supremacy by occupying more land of other nations.

It was only in the late 20th century that the idea of free trade took everyone¡¯s attention, and countries began to expand and became more accepting of other goods. But to ensure best trade practices, World Trade Organization was formed on January 1 1995, to govern international trade. WTO ensures that no country should enforce barriers to trade if all the safe trade practices are followed.

Countries can protect their domestic industries from exploitation due to cheap imports or bulk imports from foreign countries. Importing countries impose tariffs on such goods, and they can be in the form of anti-dumping duty, safeguard duty, protective duty, countervailing duty, etc.

The tariff has come a long way, and now the idea of imposing it is to protect the nation's economy.

Why Impose Tariffs?

Tariffs can be imposed as a basis for providing protection or raising revenues. The benefits of imposing tariffs are listed below-

Protection to Producers- Bulk imports or dumping of goods from certain countries might lower the revenues of local manufacturers and producers. Government imposes tariffs to prevent the exploitation of local goods.
Protection of small and medium enterprises- Every reigning government ensures that the economy grows and that each element grows equally.

Import effects such small and medium enterprises as consumers shift their attention to those goods and such industries struggle to survive. Thus, a tariff is imposed on imported products to protect infant enterprises.

Preserve National security- Many imports can create indebtedness, and countries might become eventually over-dependent on imported products, thus losing a sense of ownership. Tariff ensures equal distribution of wealth and preserves ownership rights of the countries.

Avoiding unemployment- Dependency on imported goods will eventually lead to the shutting down local industries, thereby causing unemployment for many people. Therefore, tariff protects the nation¡¯s well-being as a whole.


Aftermath of Tariff
There are certain aftermaths of tariff impositions that should be considered.

Reduction of innovation- Domestic industries might stop innovating to compete with the imported products. Thereby harming the ultimate consumers, as the market will be filled with similar products. Eventually, the prices of all the products will be the same, and there will be heavy price competition.

Trade rivalry- Trade rivalry can be developed between nations imposing tariffs on their country¡¯s goods, thereby increasing tensions between nations.

Use of dominating position- Developed countries might exploit developing or under-developed nations by imposing heavy tariffs on the exports and reducing foreign trade. This might result in a trade war, and such conditions affect the entire world.

Inflation- Imported products might end up causing inflation as it raises the standard of living of many people. People tend to spend more than their capacity, thereby increasing demand, increasing prices, and causing overall inflation.

When should the government impose tariffs?
Tariffs should be imposed by the government when there is a potential threat or harm to domestic manufacturers or based on requests.

Can tariffs be imposed only at the time of import?
tariff can be imposed at the time of the import. But the government can impose tariffs in the form of various duties before, at the time, or after the import of goods, depending on the type of damage.

Who pays the tariff and to whom?
The importing firm pays tariffs to the country's government where the goods are imported.

Disclaimer: This content is authored by an external agency. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.

Related Defintions

  • Acquisition

    hat is Acquisition?An acquisition is referred to as a business transaction in which one firm buys al

  • Amalgamation

    Have you ever played with clay before? Or water? Or sand? If you have, you might know that putting t

  • Business

    Is Business?A business can be described as an organization or enterprising entity that engages in p

  • Business Ethics

    icsEthics are important for every business, they are what steer a company in the right direction, an

  • Capitale Xpenditure

    ndituresAre you starting a new business, or are you already an entrepreneur and now want to start yo

  • Churn Rate

    urn Rate DefinitionThe churn rate at which a business or a company loses its customers over a period

  • Copyright

    t Is Copyright?Copyright is the legal right given to an intellectual property owner. As the term sug

  • Corp Social Responsibility

    cial responsibilityCorporate Social Responsibility (CSR) is the idea that a company should be a good

  • Current Assets

    tsWhat is Current Assets?Current assets are an essential part of a company's balance sheet. It can b

  • Current Ratio

    oWhen it comes to the identification of a business’s solvency, which is its ability to spend its sho

Related News

Load More
Open in App
seductrice.net
universo-virtual.com
buytrendz.net
thisforall.net
benchpressgains.com
qthzb.com
mindhunter9.com
dwjqp1.com
secure-signup.net
ahaayy.com
tressesindia.com
puresybian.com
krpano-chs.com
cre8workshop.com
hdkino.org
peixun021.com
qz786.com
utahperformingartscenter.org
worldqrmconference.com
shangyuwh.com
eejssdfsdfdfjsd.com
playminecraftfreeonline.com
trekvietnamtour.com
your-business-articles.com
essaywritingservice10.com
hindusamaaj.com
joggingvideo.com
wandercoups.com
wormblaster.net
tongchengchuyange0004.com
internetknowing.com
breachurch.com
peachesnginburlesque.com
dataarchitectoo.com
clientfunnelformula.com
30pps.com
cherylroll.com
ks2252.com
prowp.net
webmanicura.com
sofietsshotel.com
facetorch.com
nylawyerreview.com
apapromotions.com
shareparelli.com
goeaglepointe.com
thegreenmanpubphuket.com
karotorossian.com
publicsensor.com
taiwandefence.com
epcsur.com
southstills.com
tvtv98.com
thewellington-hotel.com
bccaipiao.com
colectoresindustrialesgs.com
shenanddcg.com
capriartfilmfestival.com
replicabreitlingsale.com
thaiamarinnewtoncorner.com
gkmcww.com
mbnkbj.com
andrewbrennandesign.com
cod54.com
luobinzhang.com
faithfirst.net
zjyc28.com
tongchengjinyeyouyue0004.com
nhuan6.com
kftz5k.com
oldgardensflowers.com
lightupthefloor.com
bahamamamas-stjohns.com
ly2818.com
905onthebay.com
fonemenu.com
notanothermovie.com
ukrainehighclassescort.com
meincmagazine.com
av-5858.com
yallerdawg.com
donkeythemovie.com
corporatehospitalitygroup.com
boboyy88.com
miteinander-lernen.com
dannayconsulting.com
officialtomsshoesoutletstore.com
forsale-amoxil-amoxicillin.net
generictadalafil-canada.net
guitarlessonseastlondon.com
lesliesrestaurants.com
mattyno9.com
nri-homeloans.com
rtgvisas-qatar.com
salbutamolventolinonline.net
sportsinjuries.info
wedsna.com
rgkntk.com
bkkmarketplace.com
zxqcwx.com
breakupprogram.com
boxcardc.com
unblockyoutubeindonesia.com
fabulousbookmark.com
beat-the.com
guatemala-sailfishing-vacations-charters.com
magie-marketing.com
kingstonliteracy.com
guitaraffinity.com
eurelookinggoodapparel.com
howtolosecheekfat.net
marioncma.org
oliviadavismusic.com
shantelcampbellrealestate.com
shopleborn13.com
topindiafree.com
v-visitors.net
djjky.com
053hh.com
originbluei.com
baucishotel.com
33kkn.com
intrinsiqresearch.com
mariaescort-kiev.com
mymaguk.com
sponsored4u.com
crimsonclass.com
bataillenavale.com
searchtile.com
ze-stribrnych-struh.com
zenithalhype.com
modalpkv.com
bouisset-lafforgue.com
useupload.com
37r.net
autoankauf-muenster.com
bantinbongda.net
bilgius.com
brabustermagazine.com
indigrow.org
miicrosofts.net
mysmiletravel.com
selinasims.com
spellcubesapp.com
usa-faction.com
hypoallergenicdogsnames.com
dailyupdatez.com
foodphotographyreviews.com
cricutcom-setup.com
chprowebdesign.com
katyrealty-kanepa.com
tasramar.com
bilgipinari.org
four-am.com
indiarepublicday.com
inquick-enbooks.com
iracmpi.com
kakaschoenen.com
lsm99flash.com
nana1255.com
ngen-niagara.com
technwzs.com
virtualonlinecasino1345.com
wallpapertop.net
casino-natali.com
iprofit-internet.com
denochemexicana.com
eventhalfkg.com
medcon-taiwan.com
life-himawari.com
myriamshomes.com
nightmarevue.com
healthandfitnesslives.com
androidnews-jp.com
allstarsru.com
bestofthebuckeyestate.com
bestofthefirststate.com
bestwireless7.com
britsmile.com
declarationintermittent.com
findhereall.com
jingyou888.com
lsm99deal.com
lsm99galaxy.com
moozatech.com
nuagh.com
patliyo.com
philomenamagikz.net
rckouba.net
saturnunipessoallda.com
tallahasseefrolics.com
thematurehardcore.net
totalenvironment-inthatquietearth.com
velislavakaymakanova.com
vermontenergetic.com
kakakpintar.com
begorgeouslady.com
1800birks4u.com
2wheelstogo.com
6strip4you.com
bigdata-world.net
emailandco.net
gacapal.com
jharpost.com
krishnaastro.com
lsm99credit.com
mascalzonicampani.com
sitemapxml.org
thecityslums.net
topagh.com
flairnetwebdesign.com
rajasthancarservices.com
bangkaeair.com
beneventocoupon.com
noternet.org
oqtive.com
smilebrightrx.com
decollage-etiquette.com
1millionbestdownloads.com
7658.info
bidbass.com
devlopworldtech.com
digitalmarketingrajkot.com
fluginfo.net
naqlafshk.com
passion-decouverte.com
playsirius.com
spacceleratorintl.com
stikyballs.com
top10way.com
yokidsyogurt.com
zszyhl.com
16firthcrescent.com
abogadolaboralistamd.com
apk2wap.com
aromacremeria.com
banparacard.com
bosmanraws.com
businessproviderblog.com
caltonosa.com
calvaryrevivalchurch.org
chastenedsoulwithabrokenheart.com
cheminotsgardcevennes.com
cooksspot.com
cqxzpt.com
deesywig.com
deltacartoonmaps.com
despixelsetdeshommes.com
duocoracaobrasileiro.com
fareshopbd.com
goodpainspills.com
hemendekor.com
kobisitecdn.com
makaigoods.com
mgs1454.com
piccadillyresidences.com
radiolaondafresca.com
rubendorf.com
searchengineimprov.com
sellmyhrvahome.com
shugahouseessentials.com
sonihullquad.com
subtractkilos.com
valeriekelmansky.com
vipasdigitalmarketing.com
voolivrerj.com
zeelonggroup.com
1015southrockhill.com
10x10b.com
111-online-casinos.com
191cb.com
3665arpentunitd.com
aitesonics.com
bag-shokunin.com
brightotech.com
communication-digitale-services.com
covoakland.org
dariaprimapack.com
freefortniteaccountss.com
gatebizglobal.com
global1entertainmentnews.com
greatytene.com
hiroshiwakita.com
iktodaypk.com
jahatsakong.com
meadowbrookgolfgroup.com
newsbharati.net
platinumstudiosdesign.com
slotxogamesplay.com
strikestaruk.com
trucosdefortnite.com
ufabetrune.com
weddedtowhitmore.com
12940brycecanyonunitb.com
1311dietrichoaks.com
2monarchtraceunit303.com
601legendhill.com
850elaine.com
adieusolasomade.com
andora-ke.com
bestslotxogames.com
cannagomcallen.com
endlesslyhot.com
iestpjva.com
ouqprint.com
pwmaplefest.com
qtylmr.com
rb88betting.com
buscadogues.com
1007macfm.com
born-wild.com
growthinvests.com
promocode-casino.com
proyectogalgoargentina.com
wbthompson-art.com
whitemountainwheels.com
7thavehvl.com
developmethis.com
funkydogbowties.com
travelodgegrandjunction.com
gao-town.com
globalmarketsuite.com
blogshippo.com
hdbka.com
proboards67.com
outletonline-michaelkors.com
kalkis-research.com
thuthuatit.net
buckcash.com
hollistercanada.com
docterror.com
asadart.com
vmayke.org
erwincomputers.com
dirimart.org
okkii.com
loteriasdecehegin.com
mountanalog.com
healingtaobritain.com
ttxmonitor.com
nwordpress.com
11bolabonanza.com