A "protective tariff" is intended to artificially inflate prices of imports and "protect" domestic industries from foreign competition (see also effective rate of protection).9L0 509 For example, a 50% tax on an imported machine raises the price from $100 to $150. Without a tariff, the local manufacturers could only charge $100 for the same machine; now they can charge $149 and make the sale.
A "prohibitive tariff" is one so high that no one imports any of that item.
The distinction between protective and revenue tariffs is: protective tariffs in addition to 9L0 402 protecting local producers also raise revenue; revenue tariffs produce revenue but they also offer some protection to local businesses.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment