Disadvantages Of Non-Tariff Analysis
1.1 Introduction
According to Daniel A. Sumner 2003, stating that the tariffs are taxes on imported commodities to the country or region, are among the oldest form of government intervention in economic activity. It was implemented for two obvious economic reasons. First, they provide revenue for the government. Second, they increase the economic returns to firms and a resource supplier to the domestic industry is facing competition from abroad imports. Daniel A. Sumner 2003, also states that this tariff is widely used to protect the income of domestic producers from foreign competition.
This Protection comes at a cost to the economy of domestic consumers paying higher prices for imported goods, compete, and to the overall
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Sumner (2003) stated, tariffs generate revenue for the government revenue function for importers. The interest rate on the government and the producers of the importing country in the form of tax revenue at the expense of consumers in the form of higher prices. Because tariffs bring benefits and costs to different groups differently, the net cost to the importing country is a net cost to the consumer to the producer profit less government revenue. it is equal to the sum of the efficiency losses caused by disruptions to the system price and profit from the terms of trade improvement brought about by the reduction of international …show more content…
One of the examples of Non-tariff trade barrier is domestic content requirement. Domestic content requirement not only protect the local industries, it also helps the supporting industries to prosper and gain a larger market share.
Disadvantages of non-tariff trade barriers are increasing costs to users. Trade barriers may make rising costs, especially for consumers. Perhaps one of the most important weaknesses in trade barriers is to the price of goods in a country where artificial trade barriers raise the price of imported products. Significant impact of trade barriers is to prevent job loss to foreign competition, which is the argument used by many special interest groups to allow different types of trade barriers. In the end, trade barriers force consumers to pay higher prices, this is because the other products made cheaper abroad and take up more resources to be made in the country. Next, Increased cost to the Supplier State. Prices will raise because of trade barriers not only affect
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