TARIFF

Effects of Tariffs on Welfare

It refers to the difference between the amount that buyers would be willing and able to pay for a product and the actual amount that
they pay. And the producer; It is the income that producers receive above the minimum amount required toinduce them to offer the product.

It is a price taker, facing a constant world price level for its imported product.

Income effect

Redistribution effect

Protectionist effect.

Consumer effect

Tariff Dead Weight

Importing nation that is large enough so that changes in the quantity of its imports, through tariff policy, influence the world price of the product.

National Income Effect

Effect of the terms of trade

Neighbor Impoverishment Policy

Arguments for Trade Restrictions

It asserts that if each nation produces what it does best and enables trade, in the long run all will enjoy lower prices and higher levels of production, income and consumption than could be achieved in isolation

One of the most common arguments to justify the protectionist cover of trade restrictions is that tariffs are necessary to defend domestic jobs against cheap foreign labor

Domestic producers claim that import restrictions should be put in place to offset these foreign advantages and thus create a level playing field in which all producers can compete on fair terms

The promoters of a scientific tariff seek to eliminate what they consider to be unfair competition from abroad

This argument does not deny the validity of the free trade case. However, he argues that for free trade to make sense, trading nations must temporarily protect their newly developed industries from foreign competition.

It states that a country can put itself in danger in the event of an international crisis or war if it is heavily dependent on foreign suppliers.

Political Economy of Protectionism.

It consists of companies that compete against imports, unions that represent workers and suppliers of companies in that industry.

It includes exporting companies, their workers and suppliers. It also consists of consumers, including wholesale and retail traders, and of imported products.

Concept

Tax (customs duty) levied on a product when it crosses the borders of a nation

Types

It is expressed in terms of a fixed amount of money per physical unit of the imported product.

It is expressed as a fixed percentage of the value of the imported product.

It is a combination of specific and ad valorem tariff

Effective Protection Rate

It is published in the country's tariff legislation and applies to the value of a finished product that is imported into a country.

It considers not only the nominal tariff rate of a
finished product, but also any tariff rate on imported inputs that are used in the manufacture of the finished product

Outsourcing and assembly clause abroad.

It is a key aspect of the global economy. It can occur when certain aspects of the manufacture of a product are carried out in more than one country.

It gives favorable treatment to products assembled abroad from components made in the United States.

Avoid import Tariff

It is the legal use of the tariff system for personal gain, in order to reduce the amount of duty payable by means that are within the law

It occurs when individuals or companies evade tariffs through illegal means, such as smuggling imported products into a country.

Deferred Payment of Import Tariff.

It is a place where the customs authorities indistinctly carry out the functions of handling, storage, custody, loading and unloading of foreign trade merchandise, inspection.

FTZs expand the benefits of a tax precinct by removing restrictive aspects of customs enforcement and offering more adequate manufacturing facilities

NON-TARIFF BARRIERS TO TRADE

Concept

These are measures that have been increasing since the 1960s and are intended to reduce imports and thus benefit domestic producers.

Import Quotas

It is a physical restriction on the quantity of products that can be imported during a specific period.

Specify the volume of imports allowed and the total volume must not exceed the quota

It allows a specific number of products to be imported each year, but does not specify where the product will be shipped from or who is allowed to import.

To avoid the problems of a global quota system, import quotas are distributed to certain countries.

Tariff Quotas

It allows a specific number of products to be imported at a tariff (for imports within this volume) while any imports above this level pay a tariff (those that exceed the quota).

It is the most common technique for the fees that are applied. Under this system, licenses are required to import with a tariff quota.

Export Quotas

Its main purpose is to moderate the intensity of
international competition, allowing less efficient domestic producers to participate in markets that would otherwise be lost to foreign producers selling a superior product at a lower price.

Other Non-Tariff Barriers to Trade

The US government passed a law called the Buy American Act. This law requires federal agencies to purchase materials and products from US suppliers if their prices are not “unreasonably” higher than those of foreign competitors.

It tries to correct a variety of undesirable side effects in an economy, which are related to health, safety and the environment, effects that the markets, which on their own, ignore

Average Fuel Savings Standards
(CAFÉ, corporate average fuel economy standards) represent the basis of the United States' energy conservation policy. The standards are based on the average fuel efficiency of all vehicles sold by manufacturers and apply to all passenger vehicles sold in the United States.

The US government demanded that foreign shipping companies be allowed to negotiate directly with Japanese stevedores to unload their ships, thus giving carriers a way to evade the restrictive practices of the Japan stevedores association. After a consultation between the two governments, an agreement was reached to liberalize port services in Japan.

Subsidies

Allows you to market your products at prices lower than those guaranteed by their current cost or profit considerations

It is granted to the manufacturers of the products that compete in imports. The purpose is to encourage production and thus the vitality of producers who compete with imports.

It is a benefit conferred on a company by the government that is contingent on export.

Dumpings

It is recognized as a form of international price discrimination. It occurs when foreign buyers are priced lower than domestic buyers for the same product, after covering transportation costs and customs duties.

It occurs when a company has excess inventories in foreign markets by selling in them at lower prices than in the local market.

It occurs when a producer temporarily lowers the prices charged abroad to put competitors out of business.

It occurs when the manufacturer sells, permanently, at lower prices in the foreign market, it is used when a company conceives two markets differently in order to assign fixed costs and expenses to them.

Antidumping Regulations

It is implemented when the United States Department of Commerce determines that a class or type of foreign merchandise is sold at a price lower than its fair value and the United States International Trade Commission (ITC) determines that PIJV imports cause material damage or threaten do it to an American industry.

It is calculated as the amount by which the foreign market value exceeds the United States price

It occurs when the price of the product's country of origin is not available, an effort is made to determine the price of the product in a third market.