High Tariff Rates Research Articles

Cumulative Tariff Cost Rate and Structure in the Global Value Chain: A Theoretical and Empirical Study

Abstract This paper constructs a more unified measurement framework from the perspective of the Leontief inverse matrix and Ghosh inverse matrix (Ghosh). At the same time, referring to the four-term decomposition method of Leontief inverse matrix in Muradov (2016), this paper analyzes the structural decomposition of the cumulative tariff cost rate. Results show that (1) Overall, from 2000 to 2017, China’s cumulative tariff cost rate, direct tariff cost rate, and multi-stage tariff cost rate all showed a downward trend, and the decline was greater than that of other countries (regions). China has strictly fulfilled its WTO accession commitments and has greatly reduced the tariff rate on imported intermediate goods. (2) With China’s deep participation in the global value chain, the amplification effect of China’s tariffs has increased from 2.57 in 2000 to 3.17 in 2017, and there is a certain degree of “amplification effect” (above 1.5) in tariffs in all countries in the world. (3) From the perspective of the contribution rate of various countries in the world, China contributes the most to the global cumulative tariff cost rate, which is due to the complexity of the global production network structure, rather than the excessively high tariff rate imposed by China on imported intermediate goods. In terms of policy implications, if China did not take the initiative to reduce tariffs, the structural changes in the global production network would lead to a larger global cumulative tariff cost rate.

الضريبة الوردية ودورها في التَمّييز الاقتصادي بيّن الجنسين

The persistence of economic gender segregation within society is due to the inherent acceptance of cultural expectations of the sexes. Where cultural expectations are disseminated by the media and marketed directly to females and then accept legislation in discriminating between consumers on the basis of sex along with the help of current trade policy and high tariff rates on imported goods that belong to the female component to explain the persistence of this discrimination. Tracing of processes is used to explain the causality of the pink tax throughout history. Case analyzes are used to represent the massive effects of pink sales. This research will provide awareness of the tax that is “hidden” in the daily life of women because many people are unaware or uneducated regarding the causes and persistence of this tax within society; Therefore, it is described as a "hidden" tax. The tax is levied in such a way that women are charged extra for products and services that target the female gender. These products tend to have equal or less advantages than similar products targeting men, and for this purpose this research was divided into three axes. The first axis addressed the most important studies that talked about this tax in societies, and then the second axis touched on the concept of the pink tax. And the social aspects of gender differentiation. As for the third axis, the researchers presented the most important living models to show the pink tax, and finally the research came out with a set of conclusions and suggestions related to this research

Evaluating the Effect of Tariff and Non-tariff Barriers on Exports in the Pre and Post China-Pak Free Trade Agreement (FTA) Period

Low trading costs, more significant consumer markets, and favourable economic ties between China and Pakistan provide a strong rationale for bilateral trade. Both countries have signed several bilateral trade agreements to boost mutual trade since 1963. The agreement that marked the beginning of a new era of cooperation between two trading partners and paved the way for free trade agreements was the Early Harvest Program (EHP), implemented in 2006. The first China-Pakistan Free Trade Agreement (CPFTA) was signed in November 2006 and became operational in 2007. CPFTA aimed to remove tariff and non-tariff barriers, enhance the comparative value of exports, and increase exportable surplus mainly through technical and financial cooperation. The paper critically evaluates the impact of tariff and non-tariff barriers on Pakistan’s key exports in the pre- and post-CPFTA period. Further, the study quantifies the impact of non-tariff barriers using quantitative techniques of restrictiveness index, converge ratio, and frequency index with 4-digit H.S. code industry-level data. The analysis reveals that China imposed a relatively high tariff rate on Pakistan's top five exports compared to China's other FTA partner countries. The results about the effect of non-tariff barriers (NTBs) show that exports related to cereals, edible fruits, and textile sectors are highly covered under Sanitary and Phytosanitary (SPS) and technical barriers to trade (TBT) despite FTA. Our findings have substantial implications for sustained trade ties between China and Pakistan.

The impact of differentiated feed-in tariffs on the resource misallocation of wind power: From the perspectives of the intensive and extensive margins

The widespread implementation of feed-in tariff (FIT) policies has played a crucial role in fostering the development of wind power, with their positive effects firmly established in numerous studies. However, the impact of regionally differentiated FIT policies on the misallocation of wind power resources remains a topic of contention, with limited research dedicated to this area. This paper aims to address this gap by examining the implications of such policies on the intensive and extensive margins of wind power installed capacity in China, shedding light on the underlying mechanisms driving resource misallocation. Empirical findings indicate that, concerning the intensive margin, the policy amplifies the concentration of wind power investments in regions characterized by abundant wind resources but low electricity demand. These regions present favorable conditions for large-scale wind farms with cost advantages, consequently exacerbating the misallocation of wind power resources. However, on the extensive margin, the policy promotes the likelihood of locating small and medium-sized wind farms in regions with poor wind resources but higher tariff rates, thus partially mitigating resource misallocation. In summary, China's policy hampers wind power investments in regions characterized by high electricity demand but limited wind resources. This suggests that the negative impact on the intensive margin outweighs the positive impact on the extensive margin. The findings of this study bear significant implications for the development of renewable energy support policies, particularly in countries grappling with substantial regional disparities in renewable energy resources.

A Study on Impact of Foreign Direct Investment and its Challenges Post Liberalization

In the beginning of liberalization when India was facing the financial crises for meeting the external commitments, during the Prime minister Chandra Sekhar government, India had to pledge its gold before World Bank to repay the foreign debts as India had only $ 1 billion foreign exchange reserves, at the same time, the immediate external payment was more than $ 25 billion. Therefore, India was bound to opt for liberal economic policy for the inflow and outflow of foreign investment and depreciation of Indian rupees by 300% in comparison of dollar from rupees 8 to rupees 28 per dollar. By which the foreign investors started attracted and investing their funds in India, as the India had and has potential for the growth and diversification of business, since then the India has made remarkable progress in the field of foreign direct Investment but there are lot many challenges and issues needs to be resolved to promote and attract foreign direct investment. The following issues and challenges are listed in the papers: lack of transparent and specific sectoral FDI policy and a limited FDI regime Contributing factors include high tariff rates compared to international standards, a lack of state government decision making power, a limited number of export processing zones, the absence of exit barrier liberalization, stringent labor laws, financial sector reforms, fluctuating exchange rates, and unclear political leadership. In this post, the authors have made an effort to update the best and most plausible conclusions for the justification of foreign direct investment.

Do Lower Tariff Rates Promote Global Value Chain Participation?

AbstractThe trade of intermediates now accounts for a growing share of global trade. In this highly fragmented global production system, any change in tariff rates can generate a higher impact than that of initial direct tariffs. To assess the impact of tariffs on global value chain participation, this study uses value-added trade statistics and cumulative tariff rates for 12 sectors from 168 countries for the years 1990–2015. The visual inspection suggests that initial tariffs result in higher tariff rates (almost 14%) due to a knock-on impact along with supply chains. The main empirical finding is that both faced and imposed tariff rates have significant negative impacts on sectoral global value chain participation. The effect is also persistent in the analysis if we employ cumulative tariff rates. Apart from these policy determinants, sector- and country-level endowments, such as higher relative length, capital intensity, foreign direct investment stock, and human capital appear to be the major drivers for higher total, forward, and backward global value chains participation. Even if our main results are robust, there are also some distinctions in the effects of tariff rates depending on the country- and sector-level heterogeneities. In a policy-related debate, given the cascading impacts of these liberalization initiatives, autonomous, regional, and global liberalization efforts are critical for all sectors to reap the benefits from the global production system.

Welfare-maximizing tariff versus trade-surplus-maximizing tariff: Impacts on multinational firm competition

Designing appropriate import tariff rates is crucial for global trade. In this paper, we propose game-theoretic models to investigate how tariff policies affect the competition of multinational firms (MNFs) in a global trading environment. The MNFs sell substitutable products and compete in two countries where the governments may adopt a welfare-maximizing tariff or a trade-surplus-maximizing tariff. We derive the equilibrium outcomes under different tariff policies and analyze the effects on the MNFs' profits and social welfare. We find that the MNF will solely serve the domestic market if the foreign country's tariff rate exceeds a threshold. We show that the tariff rate is higher under the trade-surplus-maximizing tariff than under the welfare-maximizing tariff. Under the welfare-maximizing tariff, the government may set a modest tariff rate to incentivize the product sales by the foreign MNF if its product's value-added level (i.e., the product value deducting the production cost) is high relative to the domestic MNF's. However, under a trade-surplus-maximizing tariff policy, the government always sets a high tariff rate to block imports. Moreover, we find that if one government deviates from the welfare-maximizing tariff to the trade-surplus-maximizing tariff, this always hurts social welfare and also harms the domestic MNF's profit if its product value-added level is low relative to the foreign MNF's. If the other government responds by switching to the trade-surplus-maximizing tariff as well, this will benefit the domestic MNF but harm social welfare.

Corporate Social Responsibility, Tariff and Technological Innovation in an Open Economy

By constructing a mixed oligopoly competition model in an open economy, the internal relationship between tariff policy changes, domestic corporate social responsibility and technological innovation is deeply revealed. The theoretical deduction shows that the tariff rate has a negative correlation with the social responsibility preference of domestic consumer-friendly enterprises, and reducing the tariff can improve the social responsibility preference of domestic enterprises; Higher tariff rates will reduce domestic consumer surplus and reduce the efficiency of tariff collection of regulators. Higher investment in technological innovation can increase domestic consumer surplus and improve domestic corporate social responsibility preference.

Domestic thermal energy storage applications: What parameters should they focus on?

Thermal energy storage (TES) is required to allow low-carbon heating to meet the mismatch in supply and demand from renewable generation, yet domestic TES has received low levels of adoption, mainly limited to hot water tanks. Current reviews and studies primarily focus on the comparison of storage materials neglecting the performances at a system level and analysis studies tend to solely look at hot water tanks, missing the key technology developments in thermal storage systems which are under development. Therefore, this paper investigates performance and cost variations of TES from material-level to system-level analysis and assesses impacts of emerging heat storage technologies. By simulating different types of TES materials and varied system integration options, a significant reduction in energy densities and increase in specific costs of TES systems were found compared to the material-level analysis. Direct electrical heating has much greater potential to integrate with TES from its high operating temperature with TES compared to heat pumps or solar thermal which are constrained to lower temperatures. TES properties are simulated in various scenarios in a domestic heating techno-economic framework. It was found that for heat pumps there is economically-limited potential for TES, even if very high energy densities are possible. In addition, the priority for TES coupling with heat pumps is low capital cost, although current high tariff rates due to the energy-crisis do improve economic viability of TES. On the other hand, with direct electrical heating, high energy density is the most valuable parameter for TES, as it allows significant quantity of demand to be shifted to very low-tariff times, in particular for low demand dwellings where negligible amounts of peak electricity could be required for heating.

A Practical Narrative of Tariff Protection in Pakistan

This research work quantifies the changes in effective rates of protection in Pakistan during the last decade of 2011–20. Based on its results, it supports a more flexible trade policy in Pakistan. Further, it identifies the sectors with strong and weak long-run productive capacities and highlights the role of trade barriers in these industries. A key concern is the decreasing productive capacity of textile and leather sectors where the textile industry has the largest share in the total exports from Pakistan. Hence, there is a dire need to invest more in research and development activities in such industries. Finally, the country needs to increase its range of export items and export destinations with more favourable terms of trade, which can be achieved by reducing its historically high import tariff rates. Effective Rate of Protection, Input-Output Table, Industry, Trade, Pakistan JEL Classification: C67, D57, F6, L5, R15

Solar energy development in households: ways to improve state policy in Ukraine and Latvia

ABSTRACT The paper investigates state policy to promote solar energy in Latvia’s and Ukraine’s households. Comparing different approaches to stimulating sectors’ development in both countries, the article evaluates the economic efficiency of solar power plants implementation based on the Levelized Cost of Electricity method and investment projects payback periods. The calculations were performed for solar power plants installed capacities ranging from 1 to 30 kW. The results revealed the fundamental differences in solar energy advancement due to the existing support mechanisms in the countries. While high feed-in tariff rates contribute to the rapid deployment of solar power plants in Ukraine’s, Latvia’s net-metering system hinders solar energy development in households. The research forms recommendations for improving policy by adjusting Ukrainian feed-in tariffs to trends in reducing solar energy costs, introducing solar energy in the Mandatory Procurement Component for Latvia, and applying preferential public financing to solar power plants construction in both states. Highlights State policy to promote solar energy in Ukraine’s and Latvia’s homes is analyzed The economic efficiency of small solar power plants is estimated for both countries Feed-in tariff in Ukraine ensures a quick payback period for solar power projects Net metering in Latvia does not provide investment attractiveness of solar plants Both countries need energy policy changes for balanced solar power development

Technical and Economical Evaluation of Solar PV System for Domestic Load in Pakistan: An Overlook Contributor to High Tariff and Load Shedding

Despite the addition of generation sources to the installed capacity, Pakistan is facing frequent load-shedding, electricity interception, and a high tariff rate. Focusing on the said issues, an investigation has been completed of all the Distribution Companies (DISCOs) along with statistics like yearly losses, recovery, and tariff are reviewed to analyze the power network. It is a clear scenario that there is still a gap between supply and demand, and the generation major part is from fossil fuels which result in the high tariff due to unvarying fuel prices and environmental issues. This in fact has become uneconomical for the domestic users to utilize electricity from the power companies. Apart from this, Pakistan is blessed with a high potential for renewable energy resources, which is a good indication from an economic and environmental point of view but unfortunately, its usage is less. Keeping in view all statistics and key issues, this article focusses on the economic and technical evaluation on different cases like load running on Water and Power Development Authority (WAPDA), load on Solar PV system with backup, load on Solar PV system without backup, and Utility with a generator backup. Various economic techniques are used as Net Present Value (NPV), Payback Period (PBP), and Internal Rate of Return (IRR) to analyze and select the cost-effective solution. From the analysis, utilization of load from the Utility company and PV systems were compared. The PV system is the most economical and reliable system when compared with other cases.

Welfare Impacts of Policy Reforms: A Case of Electricity Subsidies in Pakistan

Pakistan has been paying more than 2% of its GDP as electricity subsidies. However, these subsidies continue to be poorly targeted benefiting the rich household's disproportionately. This study aims to assess the efficiency of the power policy reform 2013 by conducting a benefit incidence analysis for the year 2012 and 2015. It also analyzes the impact of a uniform and non-uniform increase in the tariff structure on the subsidy distribution and household welfare. The study reveals that though the power policy reform (2013) have improved the tariff structure for the poor, there is still significant leakage to the richest HHs. Analyzing the impact of a uniform and non-uniform increase in tariffs across the consumption slabs shows that despite targeting the higher slabs, the benefit incidence does improve for poor but it remains limited. While it does decrease for the rich however they still benefit from the subsidies. In such a situation the benefit incidence can be improved by charging higher tariff rates for consumers having higher consumption of electricity. For example, the tariff structure can be revised for consumers using more than 300kWh by charging them a rate at least equal to the cost of supply for slabs below 300kWh.

Quid Pro Quo CSR and Trade Liberalization in a Bilateral Monopoly

We construct a dynamic bilateral monopoly game to analyze the bargaining between a foreign manufacturer and a domestic retailer regarding the wholesale price and explain the foreign upstream firm’s corporate social responsibility (CSR) initiative and its economic impacts on the domestic market. Under free trade, the foreign upstream firm’s CSR initiative realizes improvements in consumer surplus and social welfare in the home country. A “win–win–win” strategy exists, as the foreign manufacturer has more of an incentive to implement CSR when the government implements a strategic trade policy. The consumer-friendly action implemented by the foreign upstream firm leads to adequate consumer welfare and social welfare, which mitigates the government’s political hostility. With the high bargaining power of the foreign upstream firm and the low weight of the consumer-friendly upstream firm, the government should set a higher tariff rate for the foreign upstream firm to extract rent and enhance social welfare.

Hybrid Hydrogen Home Storage for Decentralized Energy Autonomy

As the share of distributed renewable power generation increases, high electricity prices and low feed-in tariff rates encourage the generation of electricity for personal use. In the building sector, this has led to growing interest in energy self-sufficient buildings that feature battery and hydrogen storage capacities. In this study, we compare potential technology pathways for residential energy storage in terms of their economic performance by means of a temporal optimization model of the fully self-sufficient energy system of a single-family building, taking into account its residential occupancy patterns and thermal equipment. We show for the first time how heat integration with reversible solid oxide cells (rSOCs) and liquid organic hydrogen carriers (LOHCs) in high-efficiency, single-family buildings could, by 2030, enable the self-sufficient supply of electricity and heat at a yearly premium of 52% against electricity supplied by the grid. Compared to lithium-ion battery systems, the total annualized cost of a self-sufficient energy supply can be reduced by 80% through the thermal integration of LOHC reactors and rSOC systems.

COVID-19 and American Attitudes toward U.S.-China Disputes.

The COVID-19 outbreak has fueled tension between the U.S. and China. Existing literature in international relations rarely focuses on virus outbreaks as factors affecting international relations between superpower countries, nor does research examine an outbreak’s potential influence on the public’s opinion about their country’s foreign policy. To bridge this research gap, this study explores the extent to which the American public may be prone to favor policies that “punish” China via existing U.S.-China disputes, such as the South China Sea dispute and the U.S.-China trade war. I conducted an online survey using Amazon’s Mechanical Turk and ran multinomial and ordered logit models to estimate the association between an individual’s preferred policies and the country or government an individual blame for the impact of the pandemic. After controlling several essential confounding factors, such as one’s levels of nationalism and hawkishness, I found strong evidence that there is a positive association between people’s attribution of blame to the Chinese government and the likelihood of supporting aggressive policy options in the two disputes with China. That is to say, U.S. citizens who believe that the Chinese government is solely culpable for the outbreak in the U.S., compared to those who think otherwise, are more likely to support hawkish policy options, such as confrontational military actions, economic sanctions, or higher tariff rates. The research provides a glimpse into where Americans may stand in these disputes with China and the potential development of U.S.-China relations in the post-pandemic era.

When Tariffs Disturb Global Supply Chains

We study unanticipated tariffs on imports of intermediate goods in a setting with firm-to-firm supply relationships. Firms that produce differentiated products conduct costly searches for potential input suppliers and negotiate bilateral prices with those that pass a reservation level of match productivity. Global supply chains are formed in anticipation of free trade. Once they are in place, the home government surprises with an input tariff. This can lead to renegotiation with initial suppliers or new search for replacements. We identify circumstances in which renegotiation generates improvement or deterioration in the terms of trade. The welfare implications of a tariff are ambiguous in this second-best setting, but plausible parameter values suggest a welfare loss that rises rapidly at high tariff rates.

The Preferential Trade Conundrum and the Multilateral Market Access Negotiations in Agriculture

Regional trade agreements have increasingly become important as a medium for effecting trade liberalization. The trend is not expected to recede. There is not to suggest that multilateral trading system under the WTO has to be relegated. Regional trade agreements may be a good avenue to pursue market access reforms, but they do have an obvious limitation in making a foray into rule-making. They rely rather heavily on multilateral trade rules and on the expectation that these fundamental trade rules are implemented so as to build upon them within the preferential setting. This is evident when one looks at the treatment of subsidies, regulatory measures, safeguards and other trade remedy instruments within these regional trade agreements. This article examines the situation of exports and imports in ten major agricultural trading countries or territories to assess the share of preferential trade in the overall trade profile. While the situation varies across the group, a significant share of trade continues to originate in or destined for countries under (MFN) Most-favoured Nation terms. In a number of regional trade agreements, including those involving the ten major countries, various sensitive agricultural sectors like dairy, meats, sugar, cereals have either been exempted from tariff elimination or preferential tariff treatment has been offered through a minor reduction in high MFN tariffs or tariff rate quotas. Tariff reforms for a number of such sensitive agriculture sectors have proven to be difficult partly because of the linkage between tariff policies and governmental internal policies and subsidies granted to such sensitive sectors. This linkage hinders commitments on tariff liberalization for the relevant sensitive sectors, especially in a preferential setting where domestic subsidy reforms might not be feasible. In order to exploit the synergy between regional trade agreements and the multilateral trading system and negotiations, it has been suggested in this article to consider reforms of sensitive agricultural sectors within the multilateral negotiations where both tariff liberalization and subsidy reforms may be pursued together.

Assessment of Performance of Functional and Partial Functional Water Supply Systems in Sunsari District of Nepal

Only 25.4% of water supply projects are fully functional in Nepal though the target of government is to provide access to safe water supply and sanitation facilities for all. Therefore a study for comparing the performance of the functional (Itahari) and partial functional (Duhabi) water supply and sanitation project after management transfer is needed to assess the indicators to improve the status of water supply and sanitation projects. Both the projects are of Sunsari district. Purposive Sampling technic was applied based on sample size of central limit theorem. Scheduled Questionnaire Survey, Expert Consultation, Focus Group Discussion and Water Sample Test were done for primary source of data whereas reports. Journals, project reports, similar studies, books, websites and audit reports were reviewed for secondary source of data. Comparative performance of both the projects was analyzed based on technical, financial and institutional indicators. From the study it was found that pressure of flow, water demand of users, chlorine demand, and quick response of staffs, water quality and open defecation free were maintained at Itahari whereas such features were lacking in Duhabi Water Supply and Sanitation Project. It was found high tariff rate, timely payment and a business plan of Itahari WSSP was better resulting into better financial performance of the system in comparison to that of Duhabi. Based on policy in both water supply and sanitation projects 33% of women along with a vital post and marginalize group based on service area representation were found. In Itahari Water Supply Project, for per thousand of connection 3.66 staffs were appointed whereas in partial functional Duhabi Water Supply System 1.91 staffs were found for per thousand connections. Itahari WSSP had maintained a citizen charter, complaint box, information system, detailed design report, As Built Drawings, Standard Operating Process and project information’s were documented which causes the management of the system effective for implementation of reliable and satisfactory of the system whereas these things need to be improved in case of Duhabi for creating the confidence about the service.

Do real exchange rate changes have symmetric or asymmetric effects on trade balance in Nigeria? Evidence from Non-linear ARDL Model

This paper investigates the asymmetric impact of real exchange changes on trade balance in Nigeria using quarterly data over the period 1999Q1-2017Q4. A non-linear Autoregressive Distributed Lag (NARDL) proposed by Shin et al (2014) is employed for this study. The findings show that real exchange change have asymmetric impact on Nigeria’s trade balance in both time horizons. Specifically, the positive real exchange rate is highly sensitive to trade balance than the negative real exchange rate. These findings therefore suggest that using discretionary monetary policy to offset Nigeria’s trade deficit due to large differential between import and export is not sufficient enough. Thus, policy makers should adopt policy-mix to manage the current economic climate of the country such as imposition of quotas on certain imported goods, high tariff rate on imported goods, provision of credit facilities and higher tax rate that reduce disposable income of consumer.