Introduction
Accessibility to an import market may be hampered by the tariff barriers, and the non-tariff barriers of the importing country.When foreign countries can enter a home country and sell product for less than the people usually see this as a great trade opportunity. However, if that product is manufactured in the home country then the home country not only loses revenue from sales on that product but the economic impacts can run even deeper. With no need to manufacture that product companies will no longer need to purchase the raw materials or hire the employees necessary to maintain the demand. To eliminate this from occurring or to impose a type of trade restriction on a foreign country tariffs and nontariffs are utilized. General Agreement on Tariffs and Trade (GATT) was succeeded by the World Trade Organization monitors tariffs and promote free trade Tariffs is a tax applied to an import and is one of the oldest trade policies in effect This tax is generally revenue for the charging country’s government.
Tariff Barriers
Tariffs, which are taxes on imports of commodities into a country or region, are among the oldest forms of government intervention in economic activity. They are implemented for two clear economic purposes. First, they provide revenue for the government. Second, they improve economic returns to firms and suppliers of resources to domestic industry that face competition from foreign imports. Tariffs are widely used to protect domestic
Producer’s incomes from foreign competition. This protection comes at an economic cost to domestic consumers who pay higher prices for import ...