Tariffs and Non Tariffs Ghana tariff structure is simple; it is comprised of three major rate categories: 1) a low rate of 0 percent 2) a moderate rate of 10 percent applied to primarily to raw materials and intermediate inputs, and also consumer goods 3) a higher rate of 25 percent on final consumer goods. In addition, “there are a numerous programs under which imports can be exempted from import duties and manufacturer can apply for permission to import raw materials and intermediate inputs at concessionary duty rates” (Barjracharya & Flatters, 2015). Tariff and non-tariff effect global financing operations by having an impact on whether countries will build and invest in companies in the home country. If an organization wants to build …show more content…
“The tariff also helps protect jobs in the industry that has eliminated the foreign competition but a negative impact is felt because it causes the consumer to pay more for a product that is imported” (Hill, 2004). If a country it prone to levy tariffs on items that an organization may need, it would increase the risk of doing business while located in that company. By having a country manufacture or produce product that can be done for less elsewhere is not a wise utilization of resources and in turn harms global trade. Tariff is a tax applied to an import and is one of the oldest trade policies in effect. This tax is generally revenue for the host country’s government. There are two types of tariffs; specific tariff and ad valorem tariff (Hill, 2004). “A specific tariff applies a set tax to a certain import. If a specific tax of fifty cents were applied to wine then the government would gain 50 cents from every bottle coming into the United States without regard to the price of the wine. An ad valorem tax is applied at a fixed percentage of the value of …show more content…
One of the examples of Non-tariff trade barrier is domestic content requirement. Domestic content requirement not only protect the local industries, it also helps the supporting industries to prosper and gain a larger market share. Non-tariff barriers are restrictions imposed upon countries such as voluntary export restrictions, antidumping and subsidies, quotas (Hill, 2004). Voluntary export restrictions (VER) is when a country limits the number of product being exported to a certain country in order to gain favor or to diffuse a situation in which trade tensions are running high. A second type of barrier is a quota. Quota is another form of tariffs where the government restricts the quantity of goods that can be imported into the country. “It is usually combine with the use of import taxes, whenever a firm imports a certain goods and it exceed the quota amount, higher tax will be imposed on the remaining goods” (Hill, 2004). Global financing can be an uncertain endeavor. Tariff can make it very hard to accurately judge whether or not to approve a risky venture. A financing institution must take a thorough look at all sides of the puzzle. In general, organizations engaging in international finance activities can experience much greater uncertainty in their revenues. An unsteady and unpredictable stream of revenue can make it hard to operate a business
·Tariffs doubly injured the majority of citizens, first by imposing heavy import taxes that were passed on to consumers and then by reducing the incentive for American manufacturers to produce goods at a lower cost than imports
Trade is the most common form of transferring ownership of a product. The concepts are very simple, I give you something (a good or service) and you give me something (a good or service) in return, everyone is happy. However, trade is not limited to two individuals. There are trades that happen outside national borders and we refer to that as international trading. Before a country does international trading, they do research to understand the opportunity costs and marginal costs of their production versus another countries production. Doing this we can increase profit, decrease costs and improve overall trade efficiency. Currently, there are negotiations going on between 11 countries about making a trade agreement called the Trans-Pacific
He then, states that the number of jobs lost barely even put a dent in the number of jobs produced by trade. Another important issue of the trade system is that the people who get rich from trade, keep getting richer while the poor stay poor. This is partially solved by protectionism (taxing imports), although it slows economic growth in the long run and protects some of the jobs that would be lost in the short run. To help understand the price of trade barriers, he explains this by stopping trade across the Mississippi River. This shows that the east side would then have to stop producing their goods and spend some of their time producing what the west side used to export. Although, there would be an increase in jobs, it would not be efficient because they are not using specialization to their full advantage. The author then moves on to the point that trade lowers the price of goods, due to it being cheaper to produce in other areas. He portrays this by showing why Nike can produce shoes in Vietnam instead of the United States. He further elaborates his point by proving that trade helps poor countries as
In a protectionist position, the government is aiming to ensure American businesses and at the same time decrease the amount of sales of foreign business. The fastest method for accomplishing this task is to increase tariffs, as in taxes on foreign goods coming into the country.... ... middle of paper ... ...
The Avalon Project, allowed Congress of the United States to take advantage of the people. The tariff angered many people. It didn’t consider everyone’s feelings, especially southerners. The people in the South argued that these tariffs are illegal. The people of South Carolina declared the tariffs useless because they weren’t fair, and southerners avoided the tariffs. To make sure that it was really illegal, the people of South Carolina made sure no one overstepped. Everything that was bound under the tariffs was nullified in South Carolina, from promises. It was made illegal for any official of the state and of the United States to tax anyone within the limits of the state of South Carolina. Legislators were informed by the people of South
Since colonial days, America had been “a source of raw materials for Europe, particularly Britain, and a market for British finished goods.’’ (Keesee, Sidwell, 192) American manufacturing would “shake up this long standing agreement.” (Keesee, Sidwell, 192) A tariff is a tax on imported goods. A protective tariff is “an unusually high tariff designed
The U.S Congress enacted the Tariff Act of 1789, which can also be known as the first major U.S tariff. To explain a little further, tariff acts are connected to federal trade policy by not only regulation, but they are one of the main factors of a way that the federal government controls taxes. This Tariff Act of 1789 was not only designed to raise revenues by placing a tax on the import of foreign goods, but encourage domestic production in business in the United States. In the same year, the Tonnage Act was also passed; this act placed a 50 cents tax on foreign ships entering American ports, 30 cents, on American built but foreign owned ships and 6 cents, on American ships. These two acts were the first two main tariffs in the United
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
Jamaica is home of the phrase “be happy, don’t worry,” and is a popular tourist spot that foreigners escape to for a temporary slice of paradise. Given the success of the tourist industry, it is easy to mistake Jamaica as a thriving country with the locals living blissfully in paradise; the clip from “Life and Debt” completely dispels these notions and introduces the negative effects that have developed from free trade policies that were recommended by the International Monetary Fund. International Monetary Fund representatives in the clip present globalization and free trade as a form of economic liberation that would bring Jamaica economic success despite its small size. An IMF representative in the clip states that, “Jamaica is a very small
... tax tariff. Based on the assumption that the company is exporting the finished goods to major developed countries such as the U.S. and the E.U. the transportation costs is high.
When thinking about international trade, you have to consider three things. Those three things being opportunity costs and comparative and absolute advantages. Comparative advantages can benefit all parties involved in the deal, as long as the goods produced, have different
Specialized controls and norms indicate an item's attributes, (for example, size, capacities, and execution), how it is named or bundled, and testing and affirmation prerequisites before it can enter a nation's market. These measures should serve honest to goodness open approach objectives, however the prerequisites can be tricky when they are excessively prohibitive or unfair, and are utilized to restrain exchange. In situations where they are more exchange prohibitive or difficult than should be expected, they are specialized hindrances to exchange. ("Canada - Trade Barriers | export.gov," n.d.)
The benefits of international trade and investment are today more widely accepted around the world than at any time in recent history. At the government level, faith in these benefits has encouraged many countries to adopt international economic policies that promote greater trade and investment. A key feature of these international economic policies is a commitment to reducing global barriers to trade and investment.
Protectionism, although it seems a perverse barrier to the development and equitable distribution of goods, ensures, especially in developing countries, that local products are able to compete with large productions and subsidies offered by exporting countries (Stein, 2016).
The main trade barrier to regional trade in Africa is that of a poor transport network. According to a study done by the United Nations Economic Commission for Africa (ECA) it was discovered that the highest transport costs are in African countries. High transport costs are due to poorly maintained roads and infrastructure and the fact that not all countries have harbours, makes transport