About Tariff Trades Between China and US

About Tariff
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About Tariff
A tariff is a charge levied on imports or exports of a particular country, and some people can refer to it as customs duty or a duty. Governments use duties to generate revenue or enhance protection on the native industries from competing countries. There are two forms of duties, which involve ad valorem tariffs and a specific tariff. Ad valorem duties are a fixed portion of the value calculated from the shipped in goods (Yao & Whalley, 2015). The tariff above changes with international prices. For instance, an increase in price leads to an increase in the tariff, while a fall in price lowers the value of tariffs. On the other hand, a specific tax is a fixed amount of money that does not change with price alternations. The two types of tax can apply to the same product as a country.
Tariffs increase the prices of foreign goods making them expensive to domestic consumers leading to a decline in the imports. It reduces the supply of imported goods due to a rise in the prices of the goods. It leads to low prices of export goods that motivate local producers to increase the production of their products. Economists argue that tariff leads to an increase in consumer prices, high produces incomes, and more government revenues can transfer money effectively from consumers to the government treasuries. Conversely, other economists say that tariffs affect the free market activities by forcing people to purchase low quality domestic goods instead of foreign goods with high quality. The other form of tariff is a protective tariff, which protects a particular domestic industry. Protective tariff increases the prices of the imports that demotivates the local consumers. It helps in maintaining domestic industries from international competitors.
Tariffs have various benefits that benefit the United States and China. The government receives revenues on the tax it levies on different products that include both import and export products. The expenses from tariffs help the government to control and defend harbor facilities. Besides, monetary values from customs duty can increase the wealth of wealth rulers as well as to pay costs unrelated to import activities. Tariffs protect the local or domestic industries of both China and the United States (Kellenberg & Levinson, 2018). It is the most common reason for the government to levy taxes on exports and imports. For instance, it is the most approach used to manage the monopoly of local suppliers. It gives an advantage to the non-local producers such as China to the United States an advantage to gain profit due to supply of foreign products to other countries.
A tariff raises the costs of the imports that give them luxurious properties. For instance, it can control the number of luxury goods in China into the hands of wealthy people. It leads to imports into the hands of a few people who can afford the expensive prices. The tariff helps to maintain the status of luxury goods from the United States to the Chinese. A tariff raises the prices of exports to protect the valuable resources in the country. Several nations use high tariffs to limit exportation and foreign consumption of their natural artifacts.
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