Imports have a direct effect on the domestic industrial, public healthcare, environmental, and safety infrastructures of countries. Imports can lead to price instability, availability of products that are a threat to a country and high competition with the local products for market share. To protect the domestic products and local industries, the government may opt for policies to restrain trade with other countries. Some of the ways a country may adopt include high tariffs on imported goods, trade restrictive quotas and other non-tariff policies such as a ban on certain imports. These protective policies are only necessary if the local industries face threats from imports, but they may also lead to a huge deficit in a country’s supply of certain goods. Restrictive tariffs make it expensive and challenging for a foreign product to access the local market. Even if it gets to the market, the price will likely be higher than the domestic product. Some of the countries with the most restrictive tariffs are looked at below.
Gambia has placed restrictions on the imports of tear gas, alcoholic spirits, scout badges, firearm silencers, used motor vehicles, and precious metals. The government of Gambia has also restricted the export of uncut diamonds, goods exported by the armed forces and warehouse goods. Tariffs are levied on these goods to restrict their movements in and outside the country. Gambian government imposes a restrictive tariff of 71.2% above the shared line of the international peak of 15% making it almost five times expensive to move such goods. The high restrictive imports have protected the local market.
As part of Djibouti’s liberalized approach to trade, the country has abolished its customs tariffs and has adopted open bidding, restricted bidding, and simple agreements between customs authorities and the importers and exporters. The restricted bidding is mainly to discourage imports of goods that are a threat to the economy of the country to the export of goods that are in shortage in the country. For restricted bidding, the tariffs are set very high to discourage trade. The country has set its restrictive tariff at 65% above the share of the global peak of 15% to discourage bidding.
Bermuda is one of the countries with the highest restrictions when it comes to international trade. All imports and exports are subjected to duties and taxes regardless of the value since there is no minimum threshold. Duties are applied at a rate between 0% and 150%. The imports are also subjected to the wharf fee. The country charges a restrictive tariff of 63.8% above the shared line of the global peak of 15% according to the 2015 World Bank reports.
High Tariffs: Domestic Market Protections vs. Foreign Trade Hindrances
Other countries with highly restrictive tariffs include Ethiopia, Guinea, Cameroon, Guinea-Bissau, Benin, and Togo. These countries have more than 50% of the share of tariff lines exceeding the global peak of 15%. Most of the countries with high restrictive tariffs are mainly in the developing economies of Africa and Asia. The high restrictive tariffs are meant to protect the local industries and products by consolidating market and promoting local competition. The danger of the more restrictive tariffs is the lack of trading partners and lack of access to the international commodity market