Tariff - Definition, Concept and What it is

It is known as Tariff to that rate or tax that is applied mainly to imports.

Less frequently, tariffs can also be applied to exports, which is done with the intention of increasing tax collection, and transit tariffs, which charge a tax on those goods that enter the national territory with destination to another country.
In general, the application of tariffs is carried out within the framework of a protectionist economic policy , that is, which aims to favor the consumption of goods produced in the country itself. In this way, those products similar to those that are produced in a significant way in the national territory are taxed with a tariff to increase their final price for the final consumer and that he / she opts for the autochthonous ones.
Types of Tariffs
Depending on the type of rate that is applied, we can distinguish between 4 different types of tariffs:

Ad valorem : This is a tariff that is measured as a percentage of the value of the merchandise. A 10% tariff will mean that a 10% rate will be applied to the value of said merchandise.
Specific : It is measured based on a specific economic quantity per unit or quantity of merchandise. For example, per metric ton of merchandise; $ 1000 fee applies
Mixed : When the tariff uses combined values ​​of the previous two
Compound : It is an ad valorem tariff in which a minimum or maximum is set or a specific tariff that applies when the ad valorem does not reach a minimum value or when it exceeds a maximum value.
Consequences of the application of tariffs
The application of tariffs is a measure that usually has a significant impact on the economy , and that generates some positive and other negative effects.
On the one hand, the collection derived from them is an additional source of income for the state, which also does not affect the economy of its fellow citizens.
On the other, some national products may benefit as a result of this state protectionism, so that certain economic sectors may experience a reactivation as a result of increased demand.
On the negative side, it should be noted that some products are out of the purchasing power of the population in general, and that the generalization of this type of measures can cause the closure of markets and stagnation of the economy, since other countries can start up similar policies that impede the free movement of goods.

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