Tariffs, Quotas and Non-Tariff Trade Barriers Research Paper

Tariffs, Quotas and Non-Tariff Trade Barriers - Research Paper ExampleThis piece illustrates that a tax levied by a government against certain imports, designed to raise revenue or to protect domestic firms. Although tariffs whitethorn be imposed on both imported and exported goods usually they be imposed on imported goods. Different types of tariffs be ad valorem tariff, specific tariff, revenue tariff, prohibitive tariff, a protective tariff, environmental tariff and retaliatory tariff. Tariffs restrict international carry on as due to their imposition, exporters behave to bear an additional cost, to which either they have to absorb which increases their approaching costs to the market and reduces their profits and causes a reduction in imports, or they have to raise their selling prices to cover the new expenses, which causes decrease in demand and resultantly imports. Means of restricting the number of imports through import licenses, either of a certain pointedness or fro m a certain country. Its different types argon a binding quota, non-binding quota, absolute quotas and tariff-rate quotas. Import quotas overly restrict international trade as they limit imports to a specified level with certainty, replace market mechanism and according to Solusource, If you are importing or exporting goods that are subject to a quota, you may have to compete with other buyers or suppliers that are attempting to negotiate similar deals (Identifying). These are nonmonetary barriers to restrict imports. These are also called NTBs its common examples are embargoes, anti-dumping measures, biases against foreign companys bids and countervailing duties etc. Although these are called nontariff trade barriers when they are implied they affect the international trade in about same way in which tariffs affect. Free trade environment leads closer to market perfection as it results in the better allocation and optimum work of resources, offers better and greater choices to cu stomers and leads towards economic development and customer satisfaction.