Tariffs are charges levied on goods entering or departing a country.

A tax or customs duty is the

money collected under a tariff. Some products are tax-free, while others, such as shoes, are taxed at
about 11%. Increasing that 11 percent to anything like 25 or 30 percent can significantly increase the
cost of these items. For example, if you buy shoes in the United States and sell them in the Philippines,
and each pair costs $10, and there is a 20% tariff, you will have to pay $12 each pair of shoes. If you only
buy one pair of shoes, you may argue that it is not a significant amount of money. However, purchasing
10,000 pairs of shoes to sell in the Philippines will be quite costly. The 20% tax on shoes indicates a
significant increase in the cost of products. Why have tariffs in the first place if they cost firms so much
money?

The GATT primarily provides for a tariff. Tariffs are clearly preferred above other forms of
protection in this agreement. Tariff concessions given or received by nations as part of their WTO
membership or negotiations are noted as ‘bound' tariffs in their tariff schedules. These schedules are an
important element of the GATT, according to Article II. The schedules are created using a positive list
method, which means that goods not included in the timetable are not guaranteed. Countries are not to
impose tariffs on WTO members higher than the commitment or ‘binding' specified in the schedule for
the covered items. A tariff is a tax placed on goods imports and exports by the government of a country
or a supranational union. Import tariffs can be a kind of foreign trade regulation and policy that charges
imported items to stimulate or safeguard home industry, in addition to being a source of income for the
government. Tariffs, along with import and export quotas, are among the most commonly employed
mechanisms of protectionist. Tariffs are usually levied by the country that imports the products. They
have two functions: they create money for the importing country and they safeguard domestic
enterprises that produce the same items. Protective tariffs levy a greater tax on imported products in
order to allow domestically manufactured versions of the same commodities to be offered at a lower
price. Revenue tariffs, in contrast to protective tariffs, exist primarily to generate money on items that
are not manufactured in the United States, allowing the government to invest in other resources. Import
taxes on oil produced abroad, for example, or items produced solely in other countries are examples of
non-protective tariffs. Importing countries profit the most from tariffs since they are the ones who
create the policy and get the money. The main advantage is that tariffs generate income from imported
products and services. It can also be used as a starting point for bilateral talks. Tariff regulation is used in
the GATT, WTO, and other trade agreements to bring governments together to set economic policy. It
can also assist a government achieve its political objectives by stabilizing or regulating its own industry.
To level the playing field, a government can levy levies on domestic items that are comparable to
international tariffs. Tariffs have the ability to make a market predictable. The agricultural trade, which is
subject to quotas, import restrictions, and taxes, is a great illustration of this.

Goods, services, and intellectual property are all covered under WTO accords. They lay forth the
liberalization principles as well as the permissible deviations. Individual nations' promises to decrease
customs duties and other trade obstacles, as well as to open and maintain open services markets, are
among them. They provide processes for resolving disagreements. They recommend that emerging
nations receive preferential attention. They compel states to make their trade policies open by alerting
the WTO about laws in place and actions implemented, as well as reporting on nations' trade policies on
a regular basis by the secretariat.