Discover and read the best of Twitter Threads about #TariffQuotas
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UK hit trade topic today: #TariffQuotas/#TariffRateQuotas
What are they?
One way to compromise between high protective tariffs and market access
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Low or zero duty for limited quantities (quotas). Beyond that high tariffs kick in—not “phased in” @nicholaswatt @BBCr4today
1/6
What are they?
One way to compromise between high protective tariffs and market access
⬇️
Low or zero duty for limited quantities (quotas). Beyond that high tariffs kick in—not “phased in” @nicholaswatt @BBCr4today
1/6
That way the two tariff levels allow some market access but keep it limited so some protection remains for local producers
It’s not the only way to compromise. Another: set a medium-level tariff for all imports of that product. But quantities would depend on supply & demand
2/6
It’s not the only way to compromise. Another: set a medium-level tariff for all imports of that product. But quantities would depend on supply & demand
2/6
Advantage of a tariff quota: the limit of low/zero duty imports is known. With a medium tariff it is not known.
Disadvantages: complexity in the way the govt hands out the quota among importers, and “quota rent”—benefits, sometimes huge, to those with a share of the quota
3/6
Disadvantages: complexity in the way the govt hands out the quota among importers, and “quota rent”—benefits, sometimes huge, to those with a share of the quota
3/6
