Definition
A tax on imports calculated as a percentage of the product’s value.
Ad valorem tariff
A tax combining both a fixed amount and a percentage of the product’s value.
Compound tariff
A limit on the quantity of goods a country allows to be exported
Export quota
The actual level of protection provided to domestic producers, considering both tariffs on final goods and tariffs on inputs.
Effective rate of protection
Who will compete better when higher import taxes make foreign goods more expensive?
Domestic producers
Selling goods below cost internationally to eliminate competitors and dominate the market
Predatory dumping
A fixed fee charged per unit of an imported good
Specific tariff
A two-tiered tariff. A specified number of goods (up to the quota limit) may be imported at one (lower) tariff rate, while imports in excess of the quota face a higher tariff rate
Tariff-rate quota
A tax on imports to counteract subsidies given to foreign producers, ensuring fair competition.
Countervailing tax
Who will have fewer choices and face higher prices when trade restrictions limit market variety?
Consumers
Government financial support to domestic exporters to make their goods cheaper internationally.
Export subsidy
Continuous selling of goods at a lower price abroad due to market demand differences.
Persistent dumping
A standard tax imposed on imports, applicable to all trading partners without special agreements.
Normal tariff
The difference between what producers are willing to accept for a good and the price they actually receive.
Producer surplus
Who will face increased costs when tariffs on imported raw materials raise production expenses?
Importers
A self-imposed limit by an exporting country on the quantity of goods sold abroad.
Voluntary export restriction
Regulations, standards, or procedures that restrict imports by requiring specific compliance.
Technical barriers
A lower tariff rate granted to certain countries under trade agreements.
Preferential tariff
The difference between what consumers are willing to pay for a good and the actual price they pay.
Consumer surplus
Who will collect more revenue from tariffs but may face trade retaliation?
Government
Rules mandating a certain percentage of a product’s components to be locally sourced.
Domestic content requirements
Health regulations aimed at protecting humans, animals, and plants from risks in imports.
Sanitary and Phytosanitary Measure
The loss of economic efficiency when market outcomes are not optimal due to policies like tariffs or quotas.
Deadweight loss
-A tax applied for imported goods that are dumping (or will be dumping)
Anti-dumping tax
Who will benefit from government support when export subsidies make their goods cheaper in foreign markets?
Domestic producers