What Are Some of the Different Types of Tariffs?

Import and export tariffs, which can be either ad valorem or non-ad valorem, are some of the ways that governments alter international trade to their advantage and regulate their economies. Ad valorem tariffs, which impose a customs duty on the value of a product or commodity, are the most common. Non-ad valorem tariffs are based on physical quantities and can be specific, mixed or compound.

Specific tariffs are non-ad valorem tariffs that calculate the customs duty solely on the quantity of the goods or commodities. This can sometimes lead to confusing circumstances depending on the exact method of measurement. For example, the United States imposes a tariff on imported cane sugar based on its sucrose content. The European Union calculates some dairy product tariffs based on the weight of the product's lactic matter.

Mixed tariffs are calculated either on a good's value or its physical quantity, with the deciding factor often a matter of which calculation results in the greater amount of customs duty that can be collected. Compound tariffs include both the good's physical quantity and its value. Pakistan, for example, calculates the customs duty charge on some petroleum products by the quantity in liters and then adds an ad valorem tariff of 25 percent of the value.

In neoclassic economic theory, tariffs can be viewed as barriers to a free market. It has been claimed by some theorists that the manufacturers in a country benefit from import tariffs in the form of competitive advantages while consumers suffer from a lack of lesser-priced import items. Due to differing opinions and circumstances, tariffs have been viewed as both positive and negative influences and have become heated political issues at various times.