Differential Tariff

a type of customs duty with different rates for the same goods. Rates may be nominal, preferential, minimum, intermediate, or maximum. The last are also known as general rates.

The developed capitalist countries use differential tariffs as a tool for state-monopoly regulation of the economy and as a weapon of discrimination against other countries in international trade. For example, raw materials, especially petroleum, are imported at preferential or minimal rates, and in many cases they enter duty-free. This leads to reduced costs for the national refining industry. Nominal or intermediate rates are applied to imported semifinished products. However, in the interests of monopolies, which use these imports to manufacture and export finished goods, preferential rates may be used. Semifinished products may even enter duty-free; for example, a country that exports textiles may permit duty-free importing of yarns.

The imperialist powers generally set maximum rates for goods imported from the socialist countries. For example, in accordance with long-term agreements, in 1972 the duty on manganese ore imported by the United States from countries enjoying a preferential customs status was set at $0.0012 per pound (453 g) of manganese content, while the same ore was being imported from the USSR at a tariff rate of $0.01 per pound, that is, eight times as much. However, in the mid-1960’s the developed capitalist countries introduced more flexible differential tariffs in trade with certain socialist countries.

In the USSR, minimum and maximum rates have been established for imported goods. In conformity with the July 28, 1961, decree of the Council of Ministers of the USSR, the minimum rates apply to dutiable goods that originate in or are being imported from countries that give most-favored-nation status to Soviet goods. Maximum rates are applied to goods that originate in or are imported from countries that do not give Soviet goods such status or that have violated a trade agreement (see alsoMOST-FAVORED-NATION STATUS).