Replies for State Government Levy Tariffs on Imports
Business and Management
the assignment here is to reply to the two posted discusses of my fellow classmates. at least (1) APA reference is required per reply.
1) Janel Wrote:
A tariff is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs are applied on different products by different countries. The average duty worldwide is about 5 percent. National sales and local taxes, and in some instances customs fees, will often be charged in addition to the tariff. Within the context of a true voluntary political society, imposts and duties might be justified but only when those taxes are strictly used to raise revenues and not to protect specific agendas. To be uniform and equitable, however, tariffs must be levied on all parties, not just a chosen few; but levying an import tax will not avoid the protectionism argument if foreign markets offer competing products. State governments are forbidden to levy tariffs on imports, discriminate against outside residents, or tax other states’ products. Tariff barriers are duties imposed on goods which effectively create an obstacle to trade, although this is not necessarily the purpose of putting tariffs in place. Tariff barriers are also sometimes known as import restraints, because they limit the amount of goods which can be imported into a country. The effect of tariffs and trade barriers on businesses, consumers and the government shifts over time. In the short run, higher prices for goods can reduce consumption by individual consumers and by businesses. During this time period, businesses will profit and the government will see an increase in revenue from duties. In the long term, businesses may see a decline in efficiency due to a lack of competition, and may also see a reduction in profits due to the emergence of substitutes for their products. For the government, the long-term effect of subsidies is an increase in the demand for public services, since increased prices, especially in foodstuffs, leave less disposable income. Tariffs would not be a sensible way to raise revenue, for starters because it is currently unconstitutional and secondly because it would greatly interfere with intrastate trade within the United States.
Lee, R., Johnson, R., & Joyce, P., (2008). Public budget system (8th ed.). Sudbury, MA: Jones and Bartlett.
2) Passion Wrote:
A tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact. Tariffs are often created to protect starter or smaller companies and developing economies, but are also used by more advanced economies with developed industries. The levying of tariffs is often highly politicized. The possibility of increased competition from imported goods can threaten domestic industries. These domestic companies may fire workers or shift production abroad to cut costs, which means higher unemployment and a less happy electorate. The unemployment argument often shifts to domestic industries complaining about cheap foreign labor, and how poor working conditions and lack of regulation allow foreign companies to produce goods more cheaply. In economics, however, countries will continue to produce goods until they no longer have a comparative advantage (not to be confused with an absolute advantage). A license is granted to a business by the government, and allows the business to import a certain type of good into the country. For example, there could be a restriction on imported cheese, and licenses would be granted to certain companies allowing them to act as importers. This creates a restriction on competition, and increases prices faced by consumers.
An import quota is a restriction placed on the amount of a particular good that can be imported. This sort of barrier is often associated with the issuance of licenses. For example, a country may place a quota on the volume of imported citrus fruit that is allowed.
International trade increases the number of goods that domestic consumers can choose from, decreases the cost of those goods through increased competition, and allows domestic industries to ship their products abroad. While all of these seem beneficial, free trade isn’t widely accepted as completely beneficial to all parties.
A government may levy a tariff on products that it feels could endanger its population. For example, South Korea may place a tariff on imported beef from the United States if it thinks that the goods could be tainted with disease. Criticisms of this sort of protectionist strategy revolve around the cost of subsidizing the development of smaller industries. If an industry develops without competition, it could wind up producing lower quality goods, and the subsidies required to keep the state-backed industry afloat could sap the economic growth. 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. For example, a country could levy a $15 tariff on each pair of shoes imported, but levy a $300 tariff on each computer imported.
Barriers are also employed by developed countries to protect certain industries that are deemed strategically important, such as those supporting national security. Defense industries are often viewed as vital to state interests, and often enjoy significant levels of protection. For example, while both Western Europe and the United States are industrialized, both are very protective of defense-oriented companies
Countries may also set tariffs as a retaliation technique if they think that a trading partner has not played by the rules. For example, if France believes that the United States has allowed its wine producers to call its domestically produced sparkling wines “Champagne” (a name specific to the Champagne region of France) for too long, it may levy a tariff on imported meat from the United States. If the U.S. agrees to crack down on the improper labeling, France is likely to stop its retaliation. Retaliation can also be employed if a trading partner goes against the government’s foreign policy objectives.
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