"But trade barriers don’t usually take the form of a massive ship. Much more often, they take the form of government-imposed trade restrictions, like tariffs, sanctions, and embargoes.
In the US, for example, tariffs on sugar have been put in place to protect domestic sugar producers. As the Cato Institute reports, “a limited amount of raw and refined sugar...is allowed to be imported duty free through preference programs, or at the rate of 0.625 cents per pound. Any sugar imported beyond the quota amount, meanwhile, is subject to a tariff of 15.36 cents per pound for raw cane sugar and 16.21 cents per pound for refined sugar. To put this in context, the world price of refined sugar in 2017 generally fluctuated between 17 cents and 25 cents per pound.”
So, depending on the price, the tax rate associated with importing extra sugar could be anywhere from 65% to 95%.
And that’s just scratching the surface. There’s also a tariff on Chinese-manufactured paper clips (yes, paper clips) of 127% in order to protect American paper clip manufacturers. Canned tuna from Ecuador will also cost you a 35% tariff, sneakers from foreign countries have a 20% tariff, tobacco imports are taxed...you get the picture. A whole array of industries have these import restrictions, and they all serve to protect domestic producers, but only at the expense of domestic consumers, who must pay higher prices as a result.
Unfortunately, since these special interest groups tend to be rather adamant about maintaining their quasi-monopolies, the tariffs that protect them tend to be very entrenched, much like the Ever Given was. But unlike the cargo ship, these trade barriers are largely invisible, so we don’t often see their detrimental effects."
In the US, for example, tariffs on sugar have been put in place to protect domestic sugar producers. As the Cato Institute reports, “a limited amount of raw and refined sugar...is allowed to be imported duty free through preference programs, or at the rate of 0.625 cents per pound. Any sugar imported beyond the quota amount, meanwhile, is subject to a tariff of 15.36 cents per pound for raw cane sugar and 16.21 cents per pound for refined sugar. To put this in context, the world price of refined sugar in 2017 generally fluctuated between 17 cents and 25 cents per pound.”
So, depending on the price, the tax rate associated with importing extra sugar could be anywhere from 65% to 95%.
And that’s just scratching the surface. There’s also a tariff on Chinese-manufactured paper clips (yes, paper clips) of 127% in order to protect American paper clip manufacturers. Canned tuna from Ecuador will also cost you a 35% tariff, sneakers from foreign countries have a 20% tariff, tobacco imports are taxed...you get the picture. A whole array of industries have these import restrictions, and they all serve to protect domestic producers, but only at the expense of domestic consumers, who must pay higher prices as a result.
Unfortunately, since these special interest groups tend to be rather adamant about maintaining their quasi-monopolies, the tariffs that protect them tend to be very entrenched, much like the Ever Given was. But unlike the cargo ship, these trade barriers are largely invisible, so we don’t often see their detrimental effects."