Introduction
Countries have set tariffs on products produced in their countries and those sourced in other areas. The aim is to facilitate trade and protect the business interests of the manufacturers and producers. This paper will assess the concepts of exports, tariffs, and the impact of Covid-19 on U.S. imports.
Export Analysis
Table 1: Export analysis for meat of sheep.
The data above details the export data for meat of sheep from the United States to other countries. Companies based in the United States that are seeking to export the same product to global markets have to consider the above data for various reasons. One of the first aspects is that export data can be used to understand the markets that have a high demand for the product (Hughes-Cromwick & Coronado, 2019). The data in table 1 above shows that Canada is the market that receives the largest amounts of the specified products. Businesses can assess and use the export data to understand the markets that will be targeted (Hughes-Cromwick & Coronado, 2019). The companies can also use the export data to asses how the trade policies are impacting the flow of goods. Another aspect is that the export data can enable the company to make informed decisions concerning the countries that will be targeted.
The export data can also help an organization understand the markets that can provide the highest value. For example, table 1 above shows that Grenada had the highest unit price, which may represent higher value for a company. The downside is that the country does not export a large amount of the product, which may indicate a small market. The company may use the unit price data to determine the locations that can provide significant benefits to the business. Emerging issues such as COVID-19 can affect the movement of goods. The yearly export data can inform the company of the trends over time, which can assist in examining the effects of trade policies.
Tariff Analysis
Table 2:Tariff analysis for meat of sheep.
The most favored nation tariff is one of the most commonly used tariffs in global trade. MFN is a tariff rate that is applied to imports from trading partners who are members of the World Trade Organization (WTO), and who do not have a preferential trade agreement such as the North American Free Trade Agreement (NAFTA) (Kuenzel & Sharma, 2021). The WTO had mandated countries to charge a standard tariff for all non-preferential partners. This means that nations that have signed different trade agreements may be subject to a higher tariff rate (Kuenzel & Sharma, 2021). Table 2 above shows the tariff for both Bahamas and Grenada is 0.17 while that for Canada is 1.02.
The difference in the tariff rates is due to Canada having a preferential trade agreement with the United States. MFN ensures that all countries receive the same benefits, which can result in nations subsidizing their domestic industries. MFN also enables companies from involved countries to access a larger market, which increases competitiveness (Kuenzel & Sharma, 2021). Export costs are reduced as a result of the use of the MFN tariff rates.
The applied tariff can be defined as the duties that a country charges imports from another nation. The rates can be below the MFN or the bound rates and can be a result of trade agreements. The applied tariff is the lowest available tariff and is applied to products that meet the rules of origin under different trade agreements (Kuenzel & Sharma, 2021). In cases where the countries do not meet the procedures, the MFN rates are used. The applied tariff is useful as it enhances trade between countries. Countries can benefit from the application of applied tariffs as it helps reduce exporting costs. This is essential as the main aim of tariffs is to protect domestic industries.
U.S. Imports and COVID-19
Table 3: U.S. imports data for disinfectants during COVID-19.
Table 3 above shows the export data for disinfectants in the United States during the pandemic. The information shows that the country that exported a large quantity of the product was Canada. The COVID-19 pandemic caused significant disruption to global trade. The Federal Drug Administration (FDA) approved disinfectant products from different manufacturers both locally and internationally (Rizzuto et al., 2020). The increase in demand resulted in a shortage of the product, which was further exacerbated by the delays in shipping. Disinfectants were essential as they could help prevent the spread of the virus (Dhama et al., 2021). Locations were advised to disinfect their premises to remain open. Research shows that disinfectants work by affecting the lipid membranes, cytoplasmic membranes, energy metabolism, and proteins of viruses (Dhama et al., 2021). The product was required in large quantities as it was effective in ensuring that certain locations could remain open.
Shortages of the product in the United States were due to an increase in demand. Longer shipping times affected the ability of companies to manufacture the product in large numbers. Access to raw materials was another issue as some of the countries chose to benefit from the increased demand by hiking prices (Rizzuto et al., 2020). Other nations stopped exporting certain raw materials that were needed for the manufacture of disinfectants (Rizzuto et al., 2020). As a result, the U.S. had to increase imports from other friendly nations. At the height of the pandemic, the shortages lasted weeks, with companies having a backlog of requests for the products (Rizzuto et al., 2020). The effect was an increase in prices for the product and an increase in imports. Both Canada and Mexico are members of NAFTA, which gives them preferential treatment when trading with the United States. The import data shows that countries that had signed NAFTA benefited from the shortages.
Conclusion
In summary, tariffs are crucial in advancing trade between countries and protecting domestic industries. MFN and applied tariffs can be used to reduce export costs and further enhance trade between nations. Certain situations such as the COVID-19 pandemic can create an increase in demand for a particular product.
References
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Hughes-Cromwick, E., & Coronado, J. (2019). The value of US government data to US business decisions. Journal of Economic Perspectives, 33(1), 131-46. Web.
Kuenzel, D. J., & Sharma, R. R. (2021). Preferential trade agreements and MFN tariffs: Global evidence. European Economic Review, 138, 103850. Web.
Rizzuto, P., Carignan, S., & Brevetti, R. (2020). Disinfectant shortage to last weeks without raw materials. Bloomberg Law. Web.