What is a punitive tariff?

punitive tariff. noun [ C ] COMMERCE, TAX. a very high tax that a government puts on imports in order to protect its own country’s manufacturers: The government is to impose punitive tariffs on imported luxury cars.

What is the difference between a tariff and a protective tariff?

A tariff is a tax added onto goods imported into a country; protective tariffs are taxes that are intended to increase the cost of an import so it is less competitive against a roughly equivalent domestic good.

What are the different types of tariffs?

A tariff is a tax on imported goods that is paid for by the importer. There are four types of tariffs – Ad valorem, Specific, Compound, and Tariff-rate quota. Tariffs main aims are to protect domestic industry, protect domestic jobs, national security, and in retaliation to other nations tariffs.

What is a protective tariff simple definition?

Protective tariffs are designed to shield domestic production from foreign competition by raising the price of the imported commodity. Revenue tariffs are designed to obtain revenue rather than to restrict imports.

Are punitive tariffs effective or do they mainly trigger retaliation?

Punitive tariffs damage the domestic economy in many ways: They increase the prices for final products reducing the purchasing power of consumers. In other words, tariffs encourage the misallocation of scarce resources. Retaliation by the countries affected by the trade barriers weakens economic growth even more.

What is an example of protective tariff?

A protective tariff is a choice by a national government to create a financial barrier or tax on the imports of one or more nation’s imports into the country. The import of oranges is a classic example of such a protective tariff. Not every place is able to grow citrus.

Why are protective tariffs considered negative?

Protective tariffs are considered negative because: THEY CAUSE IMPORT TO DECREASE, COUNTRIES USUALLY RAISE TARIFFS IN RETALIATION, EXPORTS OFTEN DECREASE. Protective tariffs are considered negative because: THEY CAUSE IMPORT TO DECREASE, COUNTRIES USUALLY RAISE TARIFFS IN RETALIATION, EXPORTS OFTEN DECREASE.

What are the two basic types of tariffs?

There are two types of tariffs:

• A specific tariff is levied as a fixed fee based on the type of item, such as a $1,000 tariff on a car.
• An ad-valorem tariff is levied based on the item’s value, such as 10\% of the value of the vehicle.

What’s an example of a protective tariff?

What is another name for protective tariffs?

n. anti-dumping duty.

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