Export Tariff Rates

Export Tariff Rates

7 Export Tariff Rates You Need to Know in 2022

Export tariff rates are taxes or fees that a country imposes on goods or services that are exported to another country. They can affect the competitiveness, profitability, and market access of exporters. In this article, we will explain what export tariff rates are, why they exist, how they are calculated, and what are some of the current export tariff rates for different products and countries in 2022.

What are export tariff rates?

Export tariff rates are also known as export duties, export taxes, or export levies. They are usually charged as a percentage of the value of the exported goods or services, but sometimes they can be fixed amounts per unit or quantity. Export tariff rates can be applied by the exporting country, the importing country, or both.


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Why do export tariff rates exist?

Export tariff rates can have different purposes and effects, depending on the context and the objectives of the countries involved. Some of the possible reasons for imposing export tariff rates are:

  • To raise revenue for the government
  • To protect domestic industries from foreign competition
  • To regulate the supply and demand of certain goods or services
  • To promote or discourage certain exports or imports
  • To comply with international agreements or obligations
  • To retaliate against trade disputes or sanctions

How are export tariff rates calculated?

Export tariff rates can vary depending on the product, the country of origin, the country of destination, and the existence of any preferential trade agreements (PTAs) between them. PTAs are treaties that reduce or eliminate tariffs and other trade barriers between two or more countries. Some examples of PTAs are the United States–Mexico–Canada Agreement (USMCA), the European Union (EU), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

To calculate the export tariff rate for a specific product and country, you need to know:

  • The Harmonized System (HS) code of the product: This is a six-digit code that classifies products according to their type, material, function, etc. You can find the HS code of your product using tools like the FTA Tariff Tool or Trade Map .
  • The most-favored nation (MFN) tariff rate of the product: This is the standard tariff rate that a country applies to imports from all countries that are not part of a PTA with it. You can find the MFN tariff rate of your product using tools like World Tariff Profiles or World Integrated Trade Solution .
  • The preferential tariff rate of the product: This is the reduced or zero tariff rate that a country applies to imports from countries that are part of a PTA with it. You can find the preferential tariff rate of your product using tools like the FTA Tariff Tool or Market Access Map .

The export tariff rate for your product is usually the lower of the MFN tariff rate or the preferential tariff rate, unless there are other factors that affect it, such as quotas, safeguards, anti-dumping measures, etc.

What are some of the current export tariff rates for different products and countries in 2022?

The following table shows some examples of export tariff rates for different products and countries in 2022, based on data from various sources . Note that these rates are subject to change and may not reflect all possible scenarios. Therefore, you should always verify them with official sources before making any business decisions.

ProductHS CodeExporting CountryImporting CountryMFN Tariff RatePreferential Tariff RateExport Tariff Rate
Coffee0901BrazilUSA0%0%0%
Wine2204FranceChina14%14%14%
Cheese0406USAMexico45%0% (USMCA)0%
Cars8703JapanCanada6.1%0% (CPTPP)0%
Solar panels8541ChinaIndia14.9%14.9%14.9%

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The Impact of Export Tariffs on Global Demand

Export tariffs are taxes imposed by a country on its own exports, usually to protect domestic industries or raise revenue. Export tariffs can have significant effects on the global demand for the products subject to them, depending on the elasticity of demand, the availability of substitutes, and the degree of competition in the market.

Export Tariffs and Demand Elasticity

Demand elasticity measures how responsive consumers are to changes in price. If demand is elastic, consumers will buy less of a product when its price increases, and more when its price decreases. If demand is inelastic, consumers will buy roughly the same amount of a product regardless of price changes.

Export tariffs increase the price of exported products in foreign markets, making them less competitive and attractive to consumers. Therefore, export tariffs will reduce the global demand for products with elastic demand, such as luxury goods, non-essential items, or products with many substitutes. For example, if a country imposes an export tariff on its wine, foreign consumers may switch to other sources of wine or other beverages, reducing the demand for the country’s wine exports.

On the other hand, export tariffs will have little effect on the global demand for products with inelastic demand, such as necessities, essential commodities, or products with few substitutes. For example, if a country imposes an export tariff on its wheat, foreign consumers may not be able to reduce their consumption of wheat or find alternative sources of food, maintaining the demand for the country’s wheat exports.

Export Tariffs and Market Structure

The impact of export tariffs on global demand also depends on the structure of the market for the exported product. If the market is monopolistic or oligopolistic, meaning that there are few suppliers or one dominant supplier of the product, export tariffs may not reduce the global demand significantly, as consumers have limited options to choose from. For example, if a country imposes an export tariff on its rare earth minerals, which are essential for many high-tech industries and have few alternative sources, foreign consumers may still buy them despite the higher price.

However, if the market is competitive or fragmented, meaning that there are many suppliers or no dominant supplier of the product, export tariffs may reduce the global demand substantially, as consumers have many options to choose from. For example, if a country imposes an export tariff on its cotton, which is widely produced and traded by many countries, foreign consumers may switch to other sources of cotton or other fabrics, reducing the demand for the country’s cotton exports.

Export tariffs are a form of trade policy that can affect the global demand for the products subject to them. The magnitude and direction of this effect depend on several factors, such as the elasticity of demand, the availability of substitutes, and the degree of competition in the market. Export tariffs can be used as a tool to protect domestic industries or raise revenue, but they can also have negative consequences for exporters and consumers.

References:

https://core.ac.uk/download/pdf/6958854.pdf

https://core.ac.uk/download/pdf/6958854.pdf

https://www.export.gov/FTA-Tariff-Tool

https://legacy.export.gov/article?id=How-do-I-determine-the-tariff-rate-for-my-product

https://www.trade.gov/knowledge-product/mexico-import-tariffs

https://www.export.gov/FTA-Tariff-Tool
https://www.trademap.org/
https://www.wto.org/english/res_e/booksp_e/tariff_profiles21_e.pdf
https://wits.worldbank.org/
https://www.macmap.org/



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