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What is a Customs Duty?

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Customs duties, or tariffs, are taxes on imports and exports. They serve as a hidden consumption tax that shows up in the cost of goods and services.
The purpose of customs duties is often to create barriers to trade designed to protect local industry. However, in practice other countries typically retaliate for customs duties with duties of their own. As such, duties on one good may protect one industry but end up hurting another. In the worst case, imposition of customs duties can escalate between countries, a phenomena known as a trade war, that damages the economy of both nations and pushes up prices for consumers.
Economic models typically predict that customs duties reduce global economic output. However, efforts to reduce tariffs such as free trade agreements tend to be highly political because they often include terms that restrict the autonomy of national governments.
Overview: Customs Duty
A tax levied on certain imports and exports.
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Business Costs

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Applied Cost
Business Equipment
Capacity Cost
Capital Improvement
Carrying Costs
Closing Costs
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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