alleryStart learning →What is a preferential tariff?
AA tariff that falls each year until it reaches zero
BA tariff that is lower for some nations than for others
CA tariff that applies only to goods bought by governments
DA tariff that is charged on exports rather than on imports
Answer & Solution
Correct answer: B. A tariff that is lower for some nations than for others
1. A preferential tariff is a tariff that is lower for some nations than for others.
2. It gives advantages to one nation, or to several, over the rest.
3. Former British territories that remain in the Commonwealth pay lower tariffs when trading with Great Britain.
4. A tariff that declines over time is a phase-out schedule rather than a preference.
5. Tariffs are taxes on imports, so an export charge would not be a tariff.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 3 "Competing in the Global Marketplace", section 3.5 International Economic Communities_
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