A tariff is either (1) a tax on imports or exports (trade tariff) in and out of a country, or (2) a list or schedule of prices for such things as rail service, bus routes, and electrical usage (electrical tariff, etc.).^[1]

Etymology[link]

The word comes from the Italian word tariffa "list of prices, book of rates," which is derived from the Arabic ta'rif "to notify or announce."^[2]

Trade tariffs in the United States[link]

Tariffs, often called customs, were by far the largest source of United States federal revenue from the 1790s to the eve of World War I, until they were surpassed by income taxes.

Economic analysis[link]

Neoclassical economic theorists tend to view tariffs as distortions to the free market. Typical analyses find that tariffs tend to benefit domestic producers and government at the expense of consumers, and that the net welfare effects of a tariff on the importing country are negative. Normative judgments often follow from these findings, namely that it may be disadvantageous for a country to artificially shield an industry from world markets, and that it might be better to allow a collapse to take place. Opposition to all tariffs is part of the free trade principle; the World Trade Organization aims to reduce tariffs and to avoid countries discriminating between differing countries when applying tariffs.

The diagram to the right shows the costs and benefits of imposing a tariff on a good in the domestic economy, Home.

When incorporating free international trade into the model we use a supply curve denoted as Pw. This curve makes the assumption that the international supply of the good or service is perfectly elastic and that the world can produce at a near infinite quantity at the given price. Obviously, in real world conditions this is somewhat unrealistic, but making such assumptions is unlikely to have a material impact on the outcome of the model.

At world equilibrium, Pw, Home produced only S amount of the good, but had a demand of D. The difference between S and D, SD was filled by importing from abroad. After the imposition of tariff, domestic price rises from Pw to Pt but foreign export prices fall from Pw to Pt* due to the difference in tax incidence on the consumers (at home) and producers (abroad).

At the new price level at Home, Pt, which is higher than the previous Pw, more of the good is produced at Home – it now makes S* of the good. Due to the higher price, only D* of the good is demanded by Home. The difference between S* and D*, S*D* is filled by importing from abroad. Thus, imposition of tariffs reduce the quantity of imports from SD to S*D*.

Domestic producers enjoy a gain in their surplus. Producer surplus, defined as the difference between what the producers were willing to receive by selling a good and the actual price of the good, expands from the region below Pw to the region below Pt. Therefore, the domestic producers gain an amount shown by the area A.

Domestic consumers face a higher price, reducing their welfare. Consumer surplus is the area between the price line and the demand curve. Therefore, the consumer surplus shrinks from the area above Pw to the area above Pt, i.e. it shrinks by the areas A, B, C and D.

The government gains from the tariffs. It charges an amount PtPt* of tariff for every good imported. Since S*D* goods are imported, the government gains an area of C and E.

Interestingly, the triangles B and D are lost by the consumers without any gain by any other party within the society. Therefore, areas B and D represent the dead weight lost to the society.

The net loss to the society due to the tariff would be given by the total costs of the tariff minus its benefits to the society. Therefore, we can conclude that the net welfare loss due to the tariff is equal to:

Consumer Loss – Government revenue – Producer gain

or graphically, this gain is given by the areas shown by:

(A + B + C + D) – (C + E) – A

= B + D – E

that is, tariffs are beneficial to the society if the area given by the rectangle E more than offsets the losses shown by triangles B and D. Rectangle E is called the terms of trade gain whereas the two triangles B and D are also called efficiency loss, as this cost is incurred because tariffs reduce the incentives for the society to consume and produce.

The model above is only completely accurate in the extreme case where none of the consumers belong to the producers group and the cost of the product is a fraction of their wages. If instead, we take the opposite extreme, and assume all consumers come from the producers' group, and also assume their only purchasing power comes from the wages earned in production and the product costs their whole wage, then the graph looks radically different. Without tariffs, only those producers/consumers able to produce the product at the world price will have the money to purchase it at that price.

Note also, that with or without tariffs, there is no incentive to buy the imported goods over the domestic, as the price of each is the same. Only by altering available purchasing power through debt, selling off assets, or new wages from new forms of domestic production, will the imported goods be purchased. Or, of course, if its price were only a fraction of wages.^{[citation needed]}

In the real world, as more imports replace domestic goods, they consume a larger fraction of available domestic wages, moving the graph towards this view of the model. If new forms of production are not found in time, the nation will go bankrupt, and internal political pressures will lead to debt default, extreme tariffs, or worse.^{[citation needed]}

Establishing tariffs inefficiently slows down this process at the expense of the consumer's real wages, allowing more time for new forms of production to be developed, but also buttresses industries which may never regain competitive prices.^{[citation needed]}

Political analysis[link]

The tariff has been used as a political tool to establish an independent nation; for example, the United States Tariff Act of 1789, signed specifically on July 4, was called the "Second Declaration of Independence" by newspapers because it was intended to be the economic means to achieve the political goal of a sovereign and independent United States.^[3]

In modern times, the political impact of tariffs has been seen in a positive and negative sense. The 2002 United States steel tariff imposed a 30% tariff on a variety of imported steel products for a period of three years. American steel producers supported the tariff,^[4] but the move was criticised by the Cato Institute.^[5]

Tariffs can occasionally emerge as a political issue prior to an election. In the leadup to the 2007 Australian Federal election, the Australian Labor Party announced it would undertake a review of Australian car tariffs if elected.^[6] The Liberal Party made a similar commitment, while independent candidate Nick Xenophon announced his intention to introduce tariff-based legislation as "a matter of urgency".^[7]

Tariffs within technology strategies[link]

When tariffs are an integral element of a country's technology strategy, the tariffs can be highly effective in helping to increase and maintain the country's economic health. As an integral part of the technology strategy, tariffs are effective in supporting the technology strategy's function of enabling the country to out maneuver the competition in the acquisition and utilization of technology in order to produce products and provide services that excel at satisfying the customer needs for a competitive advantage in domestic and foreign markets.

In contrast, in economic theory tariffs are viewed as a primary element in international trade with the function of the tariff being to influence the flow of trade by lowering or raising the price of targeted goods to create what amounts to an artificial competitive advantage. When tariffs are viewed and used in this fashion, they are addressing the country's and the competitors' respective economic healths in terms of maximizing or minimizing revenue flow rather than in terms of the ability to generate and maintain a competitive advantage which is the source of the revenue. As a result, the impact of the tariffs on the economic health of the country are at best minimal but often are counter-productive.

A program within the US intelligence community, Project Socrates, that was tasked with addressing America's declining economic competitiveness, determined that countries like China and India were using tariffs as an integral element of their respective technology strategies to rapidly build their countries into economic superpowers. It was also determined that the US, in its early years, had also used tariffs as an integral part of what amounted to technology strategies to transform the country into a superpower.^[8]

See also[link]

Types of tariff:

• Environmental tariff
• Excise duty
• Import quota
• List of tariffs
• Telecommunications tariff

Trade dynamics:

• Deadweight loss
• Effective rate of protection

Trade liberalisation:

• General Agreement on Tariffs and Trade (GATT)
• Swiss Formula
• United States International Trade Commission

General:

• Trade barrier
• Protectionism
• Embargo

References[link]

Further reading[link]

• Salvatore, Dominick (2005), Introduction to International Economics (First ed.), Hoboken, NJ: Wiley, ISBN 0-471-20226-6 .
• Taussig, F. W. (1911), "Tariff", Encyclopædia Britannica, 26 (11th ed.), pp. 422–427, http://www.econlib.org/library/Taussig/tsgEnc1.html .

External links[link]

• World Bank's site for Trade and Tariff
• UN's ITC website for accessible tariff information
• WTO Tariff Analysis Online - Detailed information on tariff and trade data

Sheila Dikshit
Sheila Dikshit giving an Interview
Chief Minister of Delhi
Incumbent
Assumed office 3 December 1998
Preceded by	Sushma Swaraj[1]
Personal details
Born	(1938-03-31) 31 March 1938 (age 74) Kapurthala, Punjab, British India
Political party	Indian National Congress
Spouse(s)	Vinod Dikshit (deceased)
Children	son and daughter[2]
Alma mater	University of Delhi
As of 12 November, 2008 Source: Government of Delhi

Sheila Dikshit (Hindi: शीला दीक्षित, born 31 March 1938) is an Indian politician who has been the Chief Minister of Delhi since 1998. She is from the Indian National Congress. Dikshit was sworn in as the Chief Minister for a third consecutive term of the Government of Delhi state in January 2009 after pulling a victory in November 2008 state elections. She is the second woman Chief Minister of Delhi and represents the New Delhi Constituency in the Legislative Assembly of Delhi.

Early life[link]

Dikshit holds a Master of Arts degree. She received her education in New Delhi, and later Miranda House, University of Delhi. She is also the recipient of Doctor of Philosophy, honoris causa, from the University of Delhi. She was married into the family of Shri Umashankar Dikshit, a noted independence activist and a former Governor and Union Cabinet Minister (in U.P. Vill. Ugu Distt. Unnao). Her late husband Vinod Dikshit was a member of the Indian Administrative Service (IAS). She has two children, son Sandeep Dikshit, who is a member of parliament from East Delhi for Congress and daughter Latika Syed.^[3][4]

Political career[link]

During the period between 1984 and 1989, she represented Kannauj Parliamentary Constituency of Uttar Pradesh. As a member of Parliament, she served on the Estimates Committee of Lok Sabha. Dikshit also chaired the Implementation Committee for Commemoration of Forty Years of India's Independence and Jawaharlal Nehru centenary. She represented India at United Nations Commission on Status of Women for five years (1984–1989). As President of the Delhi Pradesh Congress Committee, she led her party to victory in the Assembly elections in 1998. Dikshit was dubbed an outsider when she first became Delhi's Chief Minister.^[5]

She has also served as a Union Minister during 1986–1989, first as the Minister of State for Parliamentary Affairs and later as a Minister of State in the Prime Minister's Office. She was shortlisted for the 2008 World Mayor award.^{[citation needed]} As Chief Minister of Delhi, Dikshit was awarded the Best Chief Minister of India, by Journalist Association of India on 12 July 2008. In 2009, she was awarded Politician of the Year by NDTV.^{[citation needed]}.

Contributions[link]

She represented India on the U.N. Commission on Status of Women for five years (1984–89). In Uttar Pradesh, she and her 82 colleagues were jailed in August 1990 for 23 days by the state government when she led a movement against the atrocities being committed on women. Electrified by this, hundreds of thousands of citizens all over UP joined the movement and courted arrest. Earlier, in the early 1970s, she was chairperson of the Young Women's Association and was instrumental in the setting up two of most successful hostels for working women in Delhi.

She is also the Secretary of the Indira Gandhi Memorial Trust.^{[citation needed]}

Controversies[link]

Alleged corruption[link]

In 2009, Delhi lokayukta investigated a complaint filed by advocate Sunita Bhardwaj, a BJP worker, saying that Dikshit misused Rs 3.5 crore received from the Central government under the Jawahar Lal Nehru National Urban Renewal Mission for Rajiv Ratan Awas Yojana to give out personal advertisements.^[6] The lokayukta later dropped the corruptions claims.^[6][7] The complainant then sought to book Dikshit under the Representation of People’s Act, claiming she had been "misrepresenting facts" about the flats her government had built for the urban poor.^[6] It was ruled by the lokayukta that the government actions did not fall foul of the act but it will try to book her under the Section 2 (b) of the Act that stipulates adherence to norms of conduct and integrity expected of "public functionaries".^[6] The case is now nearing a verdict with the final arguments having begun.

Dikshit has hit back at the lokayukta, stating: "[lokayukta] can't be the sole judge of what is unethical" and the anti-graft watchdog should "limit itself to core corruption issues".^[7]

Commonwealth Games[link]

Dikshit was accused of corruption regarding the 2010 Commonwealth games. The Comptroller and Auditor General (CAG) report allegedly blamed her for irregularities in imported equipment for street lighting in the city during the games. Delhi chief secretary PK Tripathi stated that the Chief Minister played no part in awarding contracts for street lighting in Delhi during the Commonwealth Games.^[8]

Parole to Manu Sharma[link]

On November 2009, Dikshit came under criticism for granting parole to Manu Sharma after media reports of him visiting night clubs in Delhi emerged. Manu Sharma is accused of murdering Jessica Lal and serving life sentence. Dikshit defended her decision to sign the parole papers, declaring nothing "illegal or unlawful" was done in extending the benefit to the prisoner. The Delhi high court claimed she had given preferential treatment to Sharma in granting parole while neglecting such pleas of "poor" people languishing in jail for years. Asked about the high court's criticism of the decision, Dikshit justified her position, saying "whatever files I receive, they come through proper channels."^[9] Dikshit pointed out Delhi Lt governor Tejinder Khanna, stating that he had not objected to the parole papers and had cleared the file paving way for Sharma's parole.^[9]

Paul Henry[link]

Paul Henry, a TVNZ New Zealand broadcaster referred to Dikshit as "the dip shit woman" and "Dick Shit", going on to state that "it's so appropriate, because she's Indian, so she'd be dick-in-shit wouldn't she, do you know what I mean? Walking along the street... she's just so funny, isn't she?"^[10] New Zealand Indian Central Association president Paul Singh Bains said the fact that TVNZ was still promoting the clip on its website showed it had "totally lost the plot" and was insensitive to the offence Henry had caused.^[11]

References[link]

External links[link]

Wikimedia Commons has media related to: Sheila Dikshit

• Official profile, Government of Delhi website
• CityMayors profile

v t e Current Chief Ministers of Indian states (list)     Andhra Pradesh: Nallari Kiran Kumar Reddy Arunachal Pradesh: Nabam Tuki Assam: Tarun Gogoi Bihar: Nitish Kumar Chhattisgarh: Raman Singh Goa: Manohar Parrikar Gujarat: Narendra Modi Haryana: Bhupinder Singh Hooda Himachal Pradesh: Prem Kumar Dhumal Jammu and Kashmir: Omar Abdullah Jharkhand: Arjun Munda Karnataka: D. V. Sadananda Gowda Kerala: Oommen Chandy Madhya Pradesh: Shivraj Singh Chauhan Maharashtra: Prithviraj Chavan Manipur: Okram Ibobi Singh Meghalaya: Mukul Sangma Mizoram: Pu Lalthanhawla Nagaland: Neiphiu Rio Orissa: Naveen Patnaik Punjab: Parkash Singh Badal Rajasthan: Ashok Gehlot Sikkim: Pawan Kumar Chamling Tamil Nadu: Jayalalithaa Tripura: Manik Sarkar Uttar Pradesh: Akhilesh Yadav Uttarakhand: Vijay Bahuguna West Bengal: Mamata Banerjee Delhi: Sheila Dikshit Pondicherry: N. Rangaswamy