What is the difference between an import quota and a tariff?
An import quota and a tariff are two different types of international trade restrictions. An import quota is a limitation set by a government on the amount of a type of good that may be imported from another country in a given period. Quotas are meant to protect domestic producers from foreign competition and to raise revenue for the government. On the other hand, a tariff is a tax or duty imposed by a government on imported goods. Unlike quotas, tariffs are used primarily to raise revenue and are often determined based on the value of the good. In Washington, an import quota may be set by the US government or the WTO (the World Trade Organization). However, tariffs are determined by the US government. Quotas are enforced through direct physical restrictions on the amount of an item that may be imported, while tariffs are enforced through taxes on the goods. Generally, import quotas are more restrictive than tariffs, since they have stricter limits on the amount of goods that can be imported. Both import quotas and tariffs can have a significant impact on trade between the US and other countries. Quotas can create supply manipulation, causing domestic prices to increase, while tariffs can add extra costs for importers and consumers, making it more expensive to buy imported goods. Overall, the use of import quotas and tariffs can have a variety of economic effects on both importing and exporting countries.
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