DEFINITION of 'Multiple Column Tariff'

A tariff system where the tariff rate or import tax assessed on a particular product depends on its country of origin. This is diametrically opposite to a single tariff system, which levies the same tariff rate on a product regardless of its point of origin. Most nations employ multiple column tariffs, with the lowest tariff rates applied on goods that originate from countries with whom a nation has free trade agreements or if a nation is considered undeveloped, and the highest tariff rates assessed on products from developed countries with which it has no trade agreements and/or diplomatic relations.

BREAKING DOWN 'Multiple Column Tariff'

An oft-cited criticism of a multiple column tariff system is that it is discriminatory in nature and an impediment to free trade. However, advocates of this system maintain that it is necessary in order to improve the competitiveness of exports from lesser developed and developing nations and aid their economic development.

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