4b Flashcards
Ad-valorem Tariff
A tariff expressed as a fixed percentage of the value of the imported product.
Beggar-thy-neighbor Policy
The practice of imposing protectionist policies to achieve gains from trade at the expense of other nations.
Bonded Warehouse
A storage facility operated under the lock and key of (in the case of the United States) the U.S. Customs Service.
Compound Tariff
A tariff that is a combination of a specific tariff and an ad valorem tariff.
Dead-weight Loss
The net loss of economic benefits to a domestic economy because of the protective and consumption effect of a trade barrier.
Effective Tariff Rate
Measures the total increase in domestic production that a tariff makes possible, compared to free trade.
Free-trade Argument
If each nation produces what it does best and permits trade, over the long term each party will enjoy lower prices and higher levels of output, income, and consumption than could be achieved in isolation.
Infant Industry Argument
A tariff that temporarily shields newly developing industries from foreign competition.
Large Nation
An importing nation that is large enough so that changes in the quantity of its imports, by means of tariff policy, influence the world price of the product.
Nominal Tariff Rate
The tariff rate published in a country’s tariff schedule.
Tariff
tax on import. It is taxed on domestic consumers. Most common type of trade restriction; major source of revenue for developing countries.
Protective Tariff
tariff meant to protect domestic producers.
Revenue Tariff
tariff meant to generate revenue.
Difference between import and export tariff?
import tariffs tax goods coming in and export tariffs tax goods going out to foreign countries. Export tariffs are illegal in the US.