Pakistan Institute of Development Economics



Analysing the National Tariff Policy
Author: Usman Qadir

What is the role of import tariffs in a modern economy? Tariffs may seem an easy source of revenue, but they do have real consequences for the economy. The use of tariffs makes imported goods more expensive. It can be used as a means to prevent the exchange rate from fully adjusting to market value reducing incentives for export while increasing incentives for import substitution. Tariff policy can thus affect the product mix of country, including its direction of industrialisation, which in the complex globalised world of today determines its place in the global value chain.

Usman Qadir