What is a Tariff? | Types, Purpose, and Impact
What is Tariff? | Types, Purpose, and Impact What is a Tariff? | Types, Purpose, and Impact A tariff is a tax imposed by a country on goods imported from other countries. When foreign products enter a nation, the importer is required to pay this tax. Tariffs are an essential tool used in international trade policies and can have significant economic effects. Types of Tariffs There are several types of tariffs, each with a specific method of calculation and purpose: Ad Valorem Tariff: This is based on the value of the product. For example, a 10% tariff on the import value of the goods. If a product is worth ₹1000, a 10% tariff would mean ₹100 tax. Specific Tariff: This is a fixed fee imposed per unit of a product, regardless of its price. For example, ₹50 per kilogram of imported goods. Reciprocal Tariff: This is imposed by one country in response to tariffs levied by another country. This is a kind of retaliatory tariff. For example, U.S. President Donald Trump implemented such tariffs in re…
