What are Tariff?

A tariff is synonym to tax. It is a duty imposed on goods when they are moved across a political boundary. Normally tariffs apply to imports.

Ad-valorem Duty

Pre-decided percentage of the value of the good that is being imported. vulnerable to prices of the goods is called Ad valorem duty.

A specific Tariff

It is a tariff of a specific amount of money that does not vary with the price of the good. These tariffs are vulnerable to changes in the market or inflation unless updated periodically.

A revenue Tariff

A set of rates designed primarily to raise money for the government. A tariff on coffee imports imposed by countries where coffee cannot be grown, for example raises a steady flow of revenue.

Prohibitive tariff

It means that the tariff is so high that nearly no one imports any of that item.

Protective Tariff

It is intended to artificially inflate prices of imports and protect domestic industries from foreign competition (see also effective rate of protection,) especially from competitors whose host nations allow them to operate under conditions that are illegal in the protected nation, or who subsidize their exports.

Environmental tariff or Green Tariff or ‘eco-tariff’

It is placed on products being imported from, and also being sent to countries with substandard environmental pollution controls.