HI5016 - Tariffs & Import Duties: An Analysis of Australia's Economy

This presentation provides an overview of tariffs and import duties and their effects on the Australian economy. It begins by defining tariffs and their role in regulating trade flows, reducing imports, and generating revenue. The presentation then discusses different types of tariffs, including specific tariffs, ad valorem tariffs, and compound tariffs, as well as import duties like basic import duty and countervailing duty. It examines the effects of tariffs on industries, such as discouraging foreign competition, increasing costs for industries relying on imported raw materials, and protecting infant industries. The presentation also explores the broader economic impacts of tariffs, including their effects on national welfare, government expenses, exports, consumer prices, and employment. It further addresses the costs and benefits of tariffs, considering their impact on consumer and producer surplus. The presentation concludes by emphasizing the influence of tariffs on supply and demand and highlighting the imbalances in import and export duties.

Tariffs and import
duties
Australian Economy

Table of content
•Introduction
•Types of tariff and import duties
•Affects on Industries
•Affects on Economy
•Measuring tariff rates
•Costs and benefits of a tariff
•Conclusion
•References

Introduction
• In this presentation there is a discussion about
effects of tariffs on Australia’s economy.
• Tariff is a device most used for regulating
trade flows.
• Tariff is used to reduce amount of imports in a
country and increases internal purchases.
• Tariff is designed to generate additional
revenue for local government.
• Tariff affects on industries and is said as
common kind of barrier to trade.

Types of tariff & import duties.
Tariff:
• Specific tariffs- Taxes which are imposed as a fixed
charge for every unit of goods imported.
• Ad valorem tariffs- Taxes are charged as a fraction
of the value of imported goods.
• Compound tariffs- Taxes are combined elements of
specific and Ad valorem tariffs.
Import duties:
• Basic import duty- Basic import duty is imposed on
value of goods at specific price.
• Countervailing Duty- This duty is imposed by
central government when a country is paying
subsidy to the exporters.

Affects on industries
• Tariffs discourage foreign countries from trying to
sell products in a foreign country.
• Tariffs make foreign import either too much
expensive or not nearly as competitive as it would
be if the tariff didn't exist.
• Tariff can lead to fewer choices.
• Tariff leads to increase of cost for products which
need raw material from foreign countries and
affect the industries.
• Tariffs can benefit an economy by ensuring its
businesses have an even playing field.
• Tariffs can protect infant industries from global
competition.

Affects on economy
• Tariff affects overall national welfare.
• Increase in tariff leads to rise in expenses of Australia’s
government.
• Tariff decreases exports from other countries which
decreases there income and ability to purchase
exports.
• Tariff leads to higher rates for Australia’s consumers
and makes them insufficient to purchase more.
• Tariff preserves jobs in some industries but decreases
employment in others.

Cont…
• Increases cost to the consumers greater than
the average salary for the workers.
• Tariffs leads to other nations lack of
environmental regulations.
• Tariffs only improves standard of living at the
expense of trading partners.
• Australia’s policy dominated by well organized
special interest groups representing producers.

Costs and benefits of a tariff
•A tariff raises the price of a good in the Australia
and lowers it in the exporting country.
•Consumers lose in the Australia and gain in the
exporting country
•In producer surplus It measures the amount a
producer gains from a sale by the difference
between the price he actually receives and the
price at which he would have been willing to sell.

Conclusion
• Tariff affects supply and demand of Australia.
• Tariff escalation affect as evidence of the
imbalance in import and export.
• Tariff affects productivity and cost relevant
factors.
• In percentage terms import duties makes poor
to pay more.

References
• Berman, C., 2017. The Benefits of Tariffs &
Quotas. Bizfluent.
• Staiger, R., 2012. Non-tariff measures and the
WTO.
• Corden, W.M., 2012. Dutch disease in Australia:
policy options for a three speed‐
economy. Australian Economic Review, Vol. 45(3),
pp.290-304.
• Dyster, B. and Meredith, D., 2012. Australia in the
global economy: continuity and change.
Cambridge University Press.