For some governments, particularly in the developing world, tariffs provide a significant source of government revenues.
Every country in the world, including the United States, maintains high tariffs on at least a handful of products for which domestic producers are thought to be vulnerable to foreign competition. This so-called tariff protection is typically imposed early in an industry’s life or at moments of weakness or decline, when the threat from more efficient foreign producers is thought to be particularly severe. Once imposed, tariff protection is very difficult to remove, because the enterprises and workers who benefit from it work hard to keep it in place.
Governments use import restrictions to protect domestic health or safety. A government sometimes bans all imports of a particular good when it has reason to believe it could harm public safety or health. For example, in March 2001, the United States prohibited all European imports of livestock to protect U.S. livestock herds from foot and mouth disease, which had afflicted large numbers of animals in Europe.
Governments also restrict imports and exports for political reasons. This kind of governmental restriction on trade is called a sanction.Countries wishing to punish or influence the behavior of another country for human rights violations or for an act of aggression, for example, will sometimes restrict imports from “misbehaving” country. In times of war, adversaries will often prohibit all imports from each other, a measure known as an embargo.
For some governments, particularly in the developing world, tariffs provide a significant source of government revenues.
Every country in the world, including the United States, maintains high tariffs on at least a handful of products for which domestic producers are thought to be vulnerable to foreign competition. This so-called tariff protection is typically imposed early in an industry’s life or at moments of weakness or decline, when the threat from more efficient foreign producers is thought to be particularly severe. Once imposed, tariff protection is very difficult to remove, because the enterprises and workers who benefit from it work hard to keep it in place.
Governments use import restrictions to protect domestic health or safety. A government sometimes bans all imports of a particular good when it has reason to believe it could harm public safety or health. For example, in March 2001, the United States prohibited all European imports of livestock to protect U.S. livestock herds from foot and mouth disease, which had afflicted large numbers of animals in Europe.
Governments also restrict imports and exports for political reasons. This kind of governmental restriction on trade is called a sanction.Countries wishing to punish or influence the behavior of another country for human rights violations or for an act of aggression, for example, will sometimes restrict imports from “misbehaving” country. In times of war, adversaries will often prohibit all imports from each other, a measure known as an embargo.
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