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TARIFF CLASSIFICATION Juan Esteban Chaves Godoy - Coggle Diagram
TARIFF CLASSIFICATION Juan Esteban Chaves Godoy
Within international trade, when negotiating within a country or entering the market of another country, there are different types of risks that must be taken into account and managed.
The most common risks seen are
Credit risk, non-collection of accounts receivable
Risk of intellectual property, use of strategic information of third parties affecting the value of the services or products offered
Exchange rate, changes in rates on accounts payable or receivable, modifying the values initially negotiated
Ethical risk, confrontations due to doubts about the values of the product and the company while doing business
Shipping risk, the products are affected in their transportation either physically or judicially
Political risks, the different existing barriers of the markets for products caused by the governments in turn
Tariffs within international trade are key to the success of the exchange between nations and companies and in this way there is the existence of agreements and businesses.
Its main function is based on how these place their value depending on the commercial activity that is being carried out in a territory and depending on the product or service that is in circulation. These have different handling and functions
benefit the importing country
The importing countries are the ones who decide and make the decisions regarding politics and money
They generate income and returns to the country for the goods and services in commercialization
They can serve to create new spaces for negotiations between nations
They protect national industries from foreign competition.
Protect domestic products from dumping by foreign governments or companies
tariffs, nontariff trade barriers, and government subsidies.
Tariffs are securities that companies and nations are entitled to have in order to increase revenues from their goods and services, protect domestic industries, and exert political influence over other countries.
Non-tariff barriers are a mechanism to be able to restrict and in some way regulate commercial activity using trade barriers without having to resort to tariffs. These can be divided into forms of garnishments, penalties, payment fees
Subsidies by the government are cash flows where different public and private entities are financed and on some occasions people, to stimulate the economy and commercial activities that are affecting public sectors including products and services.
These three sections within the context of national trade differ in that two of them are mechanisms to put up barriers and regulate commercial activity between nations or companies within a territory to promote fair competition and the last one is a mechanism to promote these same activities to grow the economy nationally and internationally
Free trade is a recent concept that has generated certain types of questions about whether it is reliable or not. Like everything in terms of commerce, it has pros and cons.
Two advantages generated by this form of trade is that it can generate economic growth and improve specialization, where countries enter to compete in the areas that are most capable of trading, whether goods or services, and take their competition out of the market to attract more customers which would represent more productivity for the country.
However, such a form of economic activity brings two disadvantages and they are the lack of fair competition and the possible wear of natural resources, by having a specialization and monopolizing more clients worldwide, more production of a certain product will be needed, which would generate a wear immense in the land and environment of the country and also fair competition is essential because if one country has the best product and another also has it but in lower quality but offers different incentives, it would be denying its right to be able to offer its strategies to the market generating monopolies
Dumping occurs when foreign companies sell products at low prices on the European market.
This could be because countries are unfairly subsidizing products or companies have overproduced and are now selling products at reduced prices in other markets.
In the long term, the dumping of the tire business between China and India represents one of the problems of free trade and is the lack of competition and opportunities of the Indian industries against the Chinese, in the short term it will be good because they get a good at a lower price, however in the long term it will mean a decrease in the production of Indian companies affecting their economy
An antidumping duty is a protective duty that a national government imposes on foreign imports that it believes are priced below fair market value.
In the example of China and India, an anti-dumping tax would be the most beneficial since it would be expected in the short and long term that this would lead to a strong rebound in demand from the large Indian truck tire manufacturers.
In the example of China and India, an anti-dumping tax would be the most beneficial since it would be expected in the short and long term that this would lead to a strong rebound in demand from the large Indian truck tire manufacturers.
WTO: international organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Under Article VI of GATT 1994, and the Anti-Dumping Agreement, WTO Members can impose anti-dumping measures
dumping is occurring
domestic industry producing the like product in the importing country is suffering material injury
there is a causal link between the two
China have a socialist market economy – one in which a dominant state-owned enterprises sector exists in parallel with market capitalism and private ownership.
As the Chinese government manages sectors of state-owned companies that compete with the capitalist market, it is difficult to determine when there may be dumping since if the Chinese government wants to sell below the market, its system allows it since they are able to decide such prices and the antidumping duty could not be applied to them, making this an unfair competition
Tyre Manufactors and tyre industry
In the short term in the tire sector there will be a reluctance among consumers since they will have to pay more, however in the long term they will obtain market share since they offer better quality and the existence of competition allows different strategies to increase the volume of sale, however they will have to deal with the same trade barriers
Consumers
In the short term, consumers will have to spend a little more on this good, but in the long term, they will be able to have a better quality good in less quantity and at a reasonable price.
Goverment
In the short term they will surely have the problems and withdrawal of some Chinese industries and little tax collection, in the long term by being able to impose their right they will collect taxes from more companies, they will have greater national productivity and they will improve the social labor stability of the country