Question

Describe 2 reasons that countries enforce tariffs.

Describe the 3 most commonly used tariffs.

Which type of tariff would be most likely applied when a country seeks to increase revenue?

Answer 1

Tariffs are generally imposed for various reasons:

• To protect newly established domestic industries from foreign competition.
• To protect aging and inefficient domestic industries from foreign competition.
• To protect domestic producers from "dumping" by foreign companies or governments. ...
• To raise revenue.

Specific Tariffs:-

A fixed fee levied on one unit of an imported good is referred to as a specific tariff. This tariff can vary according to the type of good imported.

Ad Valorem Tariffs:-

The phrase "ad valorem" is Latin for "according to value," and this type of tariff is levied on a good based on a percentage of that good's value.

Revenue Tariff:

The tariff, which is imposed primarily for generating more revenues for the government is called as the revenue tariff.

Import Duties:

If the home country imposes tariff upon the products of the foreign countries as they enter its territory, the tariff is known as import tariff or import duty.

Export Duties:

If the products of the home country become subject to tax as they leave its territory to be sold in the foreign market, the tax or duty is called as export tariff or export duty.