Tariff barriers limit the amount of goods that can be imported into a country, and different types of duties may be levied. Protectionism is common but frowned upon, and organizations promote free trade by eliminating non-tariff barriers. Some tariff barriers will always remain, and nations occasionally alter them for political reasons.
Tariff barriers are tariffs imposed on goods that effectively create a barrier to trade, although this is not necessarily the purpose of applying tariffs. These barriers are also sometimes known as import restrictions, because they limit the amount of goods that can be imported into a country. Many trade promotion organizations are concerned about tariff and non-tariff barriers to free trade, and a number of nations have decided to radically reduce their trade barriers to promote the exchange of goods across their borders.
Different types of duties may be levied when goods cross international borders. With an ad valorem duty, for example, the importer has to pay a tax which is calculated as a percentage of the value of the imported goods. Specific tariffs are fixed amounts that are levied on products that are imported, regardless of value, while environmental tariffs penalize countries with poor environmental performance.
For importers, tariff barriers can make it difficult to import goods into a country. The importer may be forced to import less because tariff barriers cannot be addressed any other way and it may be necessary to charge more for the goods to make the import profitable. The tariffs are designed to force importers to do this to level the field between domestic producers and importers, allowing expensive domestic producers to compete with importers who may be able to import goods at lower costs.
Protectionism, in which nations promote the interests of domestic producers by restricting importers, is common in many nations, but it is also frowned upon, mainly by nations that want to be able to export goods for trade in other countries. Organizations such as the World Trade Organization have promoted the abolition of tariff barriers to reduce the burden on importers. Non-tariff barriers such as import quotas are also being eliminated by organizations promoting free trade.
It is likely that some tariff barriers will always remain in place, even in countries that are very open to free trade. Changing the structure of tariffs, taxes, and related charges is an ongoing project, and nations occasionally push back or lash out by radically altering their tariffs and other barriers to trade. Nations can also use trade barriers to make political statements designed to pressure other countries to change their behavior. For example, Country A may refuse to import beef from Country B until Country B demonstrates that its meat supply is free from bovine spongiform encephalitis (BSE), also known as mad cow disease.
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