TARIFF AS A TRADE BARRIER

BY  MUHAMMAD AMRI, NURZAFIRAH DAN NOR IZZATI

Tariff are taxes levied on goods traded in the trading of products internationally. Fixing this system depends on the regulations of the country and it became the most important tools to control the imports and exports. Normally, tariff implementation in international trade is the import tariff. There are three types of tariff first is specific tariff, second is ad-valorem tariff and third is compound tariff. The purpose of the implementation of this system are to protect the local industry and it is a part of government tax revenue. The tariff effect on the economy are the increasing in national revenue, reducing unemployment, improving the balance of payments, improvement or protection of local industry and the demand for domestic goods increases. However, there are also some negative effects inherent in the execution of this concept which is an adverse for consumer, unfair in income distribution, export reducing and inefficient local industries. In conclusion, the tariff system is very important in maintaining the well-being of the national economy in international trade practices.