Tariff War
Definition of 'Tariff War'An economic battle between two countries in which Country A raises tax rates on Country B's exports, and Country B then raises taxes on Country A's exports in retaliation. The increased tax rate is designed to hurt the other country economically, since tariffs discourage people from buying products from outside sources by raising the total cost on those products.One reason why a country might incite a tariff war is because it is unhappy with one of its trading partners' political decisions. It hopes that by putting enough economic pressure on the country, it can force a change in the opposing government's behavior. This type of tariff war is also known as a "customs war". |
|
Investopedia explains 'Tariff War'A tariff war can also be another name for a price war, or the continuous lowering of prices by two or more companies who are competing to gain market share. This definition is based on the secondary meaning of the word "tariff", which can mean price, especially when referring to public utilities. For example, in mid to late 2009, Indian telecom companies including Bharti Airtel, Tata DoCoMo, Reliance Communications, Idea Cellular and others engaged in a tariff war, undercutting each other's per-minute billing charges for cell phone use. |
Related Definitions
Articles Of Interest
-
How Globalization Affects Developed Countries
The increase in communications technology has companies competing in a global market. -
What Is International Trade?
Everyone's talking about globalization, so we explain what is it and why some oppose it. -
Globalization: Progress Or Profiteering?
Proponents of globalization argue that it helps the economies of developing nations and makes goods cheaper, while critics say that globalization reduces domestic jobs and exploits foreign workers. ... -
The Basics Of Tariffs And Trade Barriers
Everything you need to know - from the different types of tariffs to their effects on the local economy. -
Can The IMF Solve Global Economic Problems?
The IMF is an important tool to help struggling countries, but it's not without its problems. -
What Is The World Trade Organization?
The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it? -
Introduction To Treasury Inflation-Protected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS. -
How Risk Free Is The Risk-Free Rate Of Return?
This rate is rarely questioned - unless the economy falls into disarray. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves.
Free Annual Reports