Definitions
What is a tariff?
An extra fee or tax that a country charges on products made in other places when they are brought across the border
List the 4 types of trade barriers
Quotas, subsidies, embargoes, and non-tariff barriers
List the 2 types of tariffs
Ad Valorem Tariff and Specific Tariff
What are trade barriers?
Rules, taxes, or limits set by a government that make trading goods and services with other countries more difficult or expensive.
Why are trade barriers imposed?
To restrict imports, protect local economies, and achieve specific political or social goals
Why are tariffs important?
To protect local businesses, collect money, and negotiate trade deals
What is protectionism?
Security to shield local businesses and workers from foreign competition
What do trade barriers address?
Unfair Trade
List the 4 reasons that tariffs are imposed?
Protectionism, revenue, bargaining chip, and national security
Define an Ad Valorem Tariff
A percentage of an imported good's value
What is the impact of trade barriers?
They raise the cost of imported goods
What do tariffs result in?
Higher prices for consumers, increased government revenue, and retaliatory trade actions from foreign nation
Define subsidies
Financial help given by the government to local businesses. (Because it costs less to make the items, local shops can sell them to you for a lower price than items shipped from other countries.)
What is the most common trade barrier?
Tariff
Why are tariffs bad for the economy?
They act as a tax on imported goods that raises prices for shoppers and increases operating costs for local businesses