* Tariff and Non-Tariff Barriers

* Tariff and Non-Tariff Barriers * Until the mid-21st century most nations could put restrictions on imports from other * countries thus eliminating competition of certain goods within the importing nation. This is * called a tariff. The World Trade Organization (WTO) declared that tariffs represented a * violation of the WTO treaty and were to no longer be used by members of the WTO, but this * created non-tariff barriers. The following will describe tariffs and non-tariff barriers to trade, * why would a country impose any form of tariff, and examples of each. Both tariffs and non-tariff * barriers to trade have an effect global financing operations and managing risk. * Tariffs According to Hill (2009), “a tariff is a tax levied on imports.” A tariff is Japan placing a tax on steel; for every pound of steel imported into Japan the nation exporting the steel would have to pay this tax. The problem with tariffs is it restricts free trade. Because of this restriction of trade lead to the creation of General Agreement on Tariffs and Trade and its successor, the WTO. WTO promotes free trade by limiting the ability of national governments to adopt policies that restrict imports into their nations. Some nations believed a tariff was in the best interest of his or her nation. * A tariff does some positive things for a nation imposing the tariff. A tariff would eliminate competition of a certain product within the country. This protects domestic producers from foreign competition. This is also another way for a government to generate revenue for his or her country. Until the introduction of income tax the United States (U.S) government received a large portion of revenues from tariffs (Hill, 2009). Tariffs usually fall into two categories: specific tariffs and ad valorem tariffs. A