What You Need to Know About Tariffs and International Trade
Originally posted 2018-11-19 11:20:21
By Eliana Rocchi | amdlawgroup.com
Tariffs have been a touchy issue in global economics for hundreds of years. Simply, tariffs are taxes on imported goods. If the United States taxed coffee beans coming in from Colombia, that tax would be a tariff. They are mainly a device to protect domestic industries so as to encourage companies to purchase goods between each other, helping the national economy grow without giving any business to foreign enterprises.
In the last few decades, tariffs have been the center of many economic controversies, and have even played a major role in the economic strain between already tenuous China/United States relations. Tariffs can be used to symbolize ill feelings for a certain country, and the result is higher prices in the country that imposes the tariff. The following is a list of ten everyday items that are more expensive as a result of United States tariffs:
- Roquefort Cheese
When the United States invaded Iraq in 2003, France refused to follow. In a gesture of “revenge” against France, the Bush administration proposed a 300 percent import tax on the cheese. Luckily, the tariff never came to be. If it had, the price of the cheese could have risen anywhere from $60-$100.
- Paper Clips
ACCO and Officemate International Corporation are the two major suppliers of paper clips to the American market, and have benefited from import taxes against China since 1994.
- Canned Tuna
in 2002, Bumble Bee Seafoods began lobbying Capitol Hill to raise canned tuna tariffs against Ecuador. The tariff had been raised as high as 35%, and remains the same today.
- Synthetic Fabrics
The tariff on synthetic fabrics is “…a protective tariff as that (synthetic) fabric used to be made domestically. It is no longer produced here, but the tariff remains. Manufacturers who use it as an input are at a disadvantage globally as it now costs them more to produce their products.” If it gets repealed, the cost of synthetic fabrics would fall and lessen production costs for US manufacturers.
The import rate on some tobacco products can be as high as 350%, making it one of the most protected American products on the market.
New Balance Athletic Show, Inc. has supported the sneaker tariff for quite some time, taking pride in that it’s the largest of the last shoemakers fully producing in the United States. Thetariff is vital to Boston-based New Balance if it intends to compete against manufacturers like Nike.
- Japanese Leather
In 1986, Reagan claimed that the Japanese’s protectionist tariffs were “unreasonable and constitute(d) a burden or restriction on US commerce.” He retaliated by ordering a 40% tariff on all Japanese leather and footwear products being imported into the U.S.
Peanuts are today taxed at anywhere between 131.8% for shelled peanuts and 163.8% for unshelled.
Tariffs on brooms are very complex. For instance, whiskbrooms valued below $0.96 each are taxed at an import rate of 8% up until 61,655 dozen units have been entered or withdrawn from a warehouse for consumption, at which time an import quota is reached. Whiskbrooms valued above 96% avoid any quota but are subject to a tariff of 14%. All other types of brooms are subject to a similar 8% tariff when valued under $0.96, but have a higher quota of 121,478 dozen units. When valued at $0.96 each, these brooms, like their whisk cousins, are free of a quota, but receive the highest duty at 32%.
In 2009, a 35% tariff was imposed on tires made in China, and the U.S. waited for tire manufacturing jobs to come back to the States. Between 2009 and 2011, tire imports from China dropped by 30%, while imports from Canada increased by the same percentage. Imports to the U.S. from South Korea, Indonesia, Thailand, and Mexico all increased over 100%, with imports from Taiwan increasing by 285%.
Image Credit: http://www.desarrollosives.com/import