Flashcard 1
Front: What are Tariffs?
Back:
1.Also known as customs duties
2.Taxes or duties on imported or exported goods and services
3.Different tariffs for different commodities
4.Imposed at the border on goods going from one customs territory to another
Flashcard 2
Front: Purpose of Tariffs
Back:
1.Raise revenue for the government
2.Protect domestic import-competing industries
3.Alter relative prices of imported goods to regulate import volume
Flashcard 3
Front: Effect of Tariffs on Prices
Back:
1.Leave world market price unaffected
2.Raise prices in the domestic market
Flashcard 4
Front: What is a Specific Tariff?
Back:
1.Fixed amount of money per physical unit or weight/measurement of the commodity
2.Does not involve the value of the merchandise(*commodities that are sold and
bought in any business*)
Flashcard 5
Front: What is an Ad Valorem Tariff?
Back:
1.Duty levied as a fixed percentage of the value of the traded commodity
2.Constant percentage of the monetary value of one unit of the imported good
Flashcard 6
Front: What are Mixed Tariffs?
Back:
1.Expressed on the basis of value (ad valorem) or unit of measure (specific duty)
2.Based on which generates more income
Flashcard 7
Front: What are Compound Tariffs?
Back:
1.Combination of ad valorem and specific tariffs
2.Calculated by adding specific duty to an ad valorem duty
3.Compound tariff= tsq+ta(pq)
Flashcard 8
Front: What are Technical/Other Tariffs?
Back:
1.Calculated based on specific contents of imported goods
2.Duties payable by components or related items
3. Eg:- Solar panel and battery
Flashcard 9
Front: What are Tariff Rate Quotas (TRQs)?
Back:
1.Combine quotas and tariffs
2.Imports under specified quota portion are subject to a lower(sometimes zero)
tariff rate
3.Imports above the Quantitative threshold of quota face is much higher tariff.(if
the quantity of goods imported into a country surpasses a certain limit (the
quota), the extra goods will be subject to a much higher tax (tariff) to regulate
and control the volume of imports)
Flashcard 10
Front: What are Most-Favoured Nation (MFN) Tariffs?
Back:
1.Import tariffs countries promise to impose on WTO members
2.Highest (most restrictive) tariffs unless part of a preferential trade agreement
3. tariff that WTO members charge each other.
Flashcard 11
Front: What is a Variable Tariff?
Back:
1.Duty fixed to bring the price of an imported commodity up to the domestic support
price level
2.Eg:- Made in China
Flashcard 12
Front: What are Preferential Tariffs?
Back:
1.Lower tariffs for countries in a preferential trade agreement
2. These agreements are reciprocal.
3.Examples include EU(European Union) region and NAFTA(North American Free Trade
Agreement)
4.Affluent(rich) Countries grant 'unilateral preferential treatment' to select list
of products from specified developing countries.
5. Generalized System of Preferences (GSP) is one such system which is currently
prevailing.
Flashcard 13
Front: What is a Bound Tariff?
Back:
1.Legal commitment by a WTO member not to raise tariff rates above a certain level
2.Ensures transparency and predictability
Flashcard 14
Front: What are Applied Tariffs?
Back:
1.The duty actually charged on imports on an MFN basis
2.Must not exceed bound tariffs
Flashcard 15
Front: What is an Escalated Tariff Structure?
Back:
1.Higher tariffs on manufactured goods than on intermediate inputs and raw
materials
2.this tariff is discriminatory as it Protects manufacturing industries in
importing countries
Flashcard 16
Front: What is a Prohibitive Tariff?
Back:
1.Tariff set so high that no imports can enter
2.Eg:- walnuts
Flashcard 17
Front: What are Import Subsidies?
Back:
1.Payments per unit or as a percent of value for the importation of a good
2.Negative import tariff
3.Eg:- Japan
Flashcard 18
Front: What are Anti-Dumping Duties?
Back:
1.Protectionist tariff on foreign imports priced below fair market value
2.Offset unfair price advantage from dumping
Flashcard 19
Front: What are Countervailing Duties (CVD)?
Back:
Tariffs to offset artificially low prices from export subsidies and tax concessions
Ensure fair market-oriented pricing of imported products
