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A tariff is a form of border tax imposed by a government on an imported commodity. It is a levy imposed on exports and imports by the government or a supranational organisation.
Governments have long used tariffs to collect income and use them to safeguard domestic producers. Tariffs from the congressional budget allow governments to collect money while simultaneously safeguarding domestic enterprises.
Tariffs raise the cost of imported items while lowering the cost of domestic goods. Importing countries usually benefit from tariffs because they are the ones to impose them and collect the revenue. Tariffs benefit the economy and GDP growth.
Due to tit-for-tat tariffs imposed on each other’s exports during the escalating trade war, China has seen a rise in international tariffs with the US in recent years.
China Tariffs Regime According to the Congressional Budget
- China Customs assess and collect tariffs. General prices, most-favoured-nation (MFN) rates, and provisional rates are a few import tariff-rates types.
- Imports from the United States are evaluated at the MFN rate because China is a WTO member. Duty reductions or exemptions are available in the five Special Economic Zones, open cities, and foreign trade zones within cities.
- Companies doing business in these locations should familiarise themselves with the applicable regulations.
- For commodities that the government has classified as necessary for developing critical industries, China may apply tariff rates that are much lower than the advertised MFN rate.
US-China Trade War
- Since 2018, the two biggest economies, US and China, have been engaged in a trade war. Following an inquiry that found China stole intellectual property from American companies and coerced them to transfer technology, the US placed duties on more than $300 billion in Chinese goods, varying from clothing, footwear and electronics.
- According to Trump, because China had stolen intellectual property from the United States, the tariffs would be levied. Trump claimed that his proposed taxes on Chinese goods would make the US a much more powerful, wealthier nation.
- However, the procedures taken to enact the tariffs have raised fears of a worldwide trade war. Despite this, during the pandemic, China continued to export a record volume of goods to the United States.
- According to the office of the United States Trade Representative, the Biden government would enable certain products imported from China to avoid President Donald Trump’s high tariffs once again.
- The trade office has announced that certain tariff exemptions that ended at the end of 2020 will be reinstated. The exemptions reinstated will allow some businesses to avoid paying taxes on Chinese products found only in China.
Tariffs Levied on China, 2022
- To assist in high-quality development and reopening of the economy and GDP growth of the country, China began adjusting import and export taxes on selected items at the beginning of 2022.
- China will cut import taxes on 954 products and improve import and export tariffs on certain commodities in 2022, according to the 2022 Tariff Adjustment Plan presented by the State Council’s Customs Tariff Commission in December 2021.
- The plan will aid in the domestic market’s supply-demand fluctuations and industrial transformation and encourage low-carbon development.
Changes According to the Tariffs Levied on China
- China will raise import and export tariffs on several commodities:
To balance local demand and supply while also upgrading its industries, China increased import and export tariffs on some commodities beginning January 1, 2022. The changes are as follows:
- Repeal MFN tariffs on a few amino acids, gelatin, pork, and lead-acid power supply parts and eliminate interim import tax rates.
- Import and export duties on phosphorus and blister copper should be raised to encourage industry transformation, upgrading, and high-quality development.
- China is lowering tariffs on approximately 950 products:
Since January 1, 2022, China applied interim import-tax rates on around 954 items, which were previously subject to higher default most favoured nation taxes. Following are some items:
- Anti-cancer medications and medical products. Import tariffs on radium chloride injections, a new anti-cancer drug, have been eliminated. At the same time, import tariffs on various medical products have been reduced.
- Reducing import taxes on some high-quality aquatic products, including salmon, dishwashers, clothing for babies and equipment used for skiing, to encourage consumption upgrades and enhance the ambience of the winter Olympic Games.
- Lowering import tariffs on essential aspects such as high-voltage cords for high-speed trains and bipolar sheets for fuel cells and further lowering import tariffs on raw materials used in food processing, household products, and leather manufacturing sectors, such as cocoa beans and plant oils, to optimise and upgrade manufacturing industries.
- Oil paintings and antique artwork. Impose zero tariffs on oil paintings and other paintings over 100 years old to conform to cultural consumption demand.
- Environmental restoration using high-efficiency vehicle components and materials. To restore the environment by fostering low-carbon development and other means.
- Mineral resources. Lower import duties on natural resources in short supply in the United States, such as pyrite and pure potassium chloride.
- China will lower MFN duty rates on IT items even further:
For the seventh time, China reduced MFN tariff rates on more than 60 IT items on January 1, 2022. China’s overall tariff level will stay at 7.4 per cent after modifications.
Conclusion
According to the new congressional budget, China began imposing temporary import tariffs on 954 products in 2022, up from 883 goods taxed at short-term rates in 2021. These tariffs are lower than MFN tariffs. China has also reduced tariffs on several auto parts, which will aid in the reduction of carbon emissions. It also released tariff rates for several commodities under Regional Comprehensive Economic Partnership, a regional trade agreement that went into force on January 1, 2022. In addition, China will exclude more commodities from import taxes from the least developed nations with which it has diplomatic links, according to another statement from the finance ministry.
Prime Minister Narendra Modi visited Ireland on September 23, 2015. It was the second time an Indian Prime Minister had visited Ireland. The first being Jawaharlal Nehru’s visit in 1956. Ireland is an island nation located in Northwestern Europe and surrounded by the North Atlantic Ocean.
The Prime Minister of Ireland, Enda Kenny, had hosted PM Modi during his visit. The PM was attended by other dignitaries such as the Minister of Foreign Affairs and Trade, Charles Flanagan, and Ireland’s Ambassador to India, Feilim McLaughlin. The main aim of the visit was to create stronger ties and improve trade and cultural relations. Described below is the impact of the PM’s Ireland visit.
Impact on trade and commerce
India and Ireland have strong bilateral trade and business relations. Before the PM’s visit, trades with Ireland were valued at €650 million in business in 2014. This included exports worth €248m and imports worth €402 million.
The indigenous exports increased from €32 million in 2012 to €55 million in 2014. In 2019, the total bilateral trade was around €1.2 billion. The exports and the imports have also increased to €636 million and €480 million respectively. Currently, the total trade between India and Ireland is valued at €4.2 billion. This resulted from improved bilateral ties between the two nations, owing to Prime Minister Modi’s visit to Ireland.
Indian Companies in Ireland
Many Indian companies carry out trade and commerce in Ireland. They provide services to Irish markets and consumers across various industries. Pharmaceutical giants such as Reliance Genemedix and Amneal Pharmaceuticals operate in Ireland. Major IT companies such as Wipro, Infosys, TCS, and HCL also have a strong presence in the country. The trade relations were bolstered after Indian Prime Minister Narendra Modi visited Ireland.
Other companies like Crompton Greaves, Deepak Fasteners, Jain irrigation systems, and Shapoorji Pallonji provide consumer goods and services. Likewise, many Irish companies conduct their business in the Indian market. These companies include pharmaceutical and nutrition players like ICON and Glanbia, IT firms like Globoforce and other companies like Keventer, CRH Taxback Group, and Connolly Red Mills.
Impact on Education
Ireland has been a coveted destination for higher education for Indian students. Over 5000 Indian students have enrolled for higher studies in various institutions in Ireland. The students are admitted to engineering, technology, medicine and management colleges. More than 30 research agreements have been signed between the two nations that allow institutes in both countries to collaborate.
Many reputed institutes like Trinity College, Dublin, and Thapar University, Patiala, have signed MOUs for engineering and science disciplines programmes. Thus, Ireland is an essential collaborator in graduate and doctoral research. This collaboration is also considered an impact of the PM’s Ireland visit.
Indian Community in Ireland
Ireland is diplomatically significant for India also due to the large number of Indian citizens residing there. The Indian origin population is approximately 45,000 people, of whom 18,500 are Non-Resident Indians (NRI), and others are Persons of Indian Origin (PIO). The majority of the residents are working professionals employed in engineering, healthcare and management positions.
It has helped in establishing many policies for the Indian origin population. Two such policies in practice are wearing hijab as a part of the police uniform and the non-requirement of obtaining an additional work permit for the spouse or the partner of Critical Skill Employment Permit holders.
Cultural Impact
As a result of a large population of Indian origin citizens in Ireland and the relationship between the two nations, Ireland promotes Indian culture in various forms. One such example is the celebration of Diwali in Ireland since 2008. The event is organised every year in collaboration with Irish and Indian committees.
Further, an annual contemporary film festival is also a part of the celebration of Indian culture. The promotion of such events indicates the importance of cultural exchange between the two nations. The Irish communities also take a keen interest in conventional practices such as cultivating and consuming Indian herbs and spices. This connects the agricultural practices between the two nations. The cultural ties between the countries were strong, and Prime Minister Modi’s visit to Ireland helped strengthen them further.
Another significant practice is the celebration of International Yoga Day in Ireland. The Irish communities have accepted Yoga as a form of a healthy lifestyle. The practice is similar to the Indian tradition.
Tourism
India attracts around 44,000 Irish tourists every year. Indian tourists too visit Ireland in similar numbers. This was facilitated by the introduction of the common British-Irish visa scheme. This scheme allows the tourists to visit the U.K. and Ireland under one visa, rather than applying for two separate visas. It is valid for short stays. India also extended its Electronic Tourist Visa facility to Ireland to digitally facilitate visa approval and generation. The impact of the PM’s Ireland visit was such that it has also helped establish the tourism sector in both countries.
Conclusion
The diplomatic ties between Ireland and India have been impacted positively after Prime Minister Modi visited Ireland in 2015. It was an essential step toward strengthening the bilateral relationship between these two nations. India and Ireland have been important to each other since the 1900s.
In 2010 and 2017, two honorary consulates were established in Chennai and Kolkata. Later in 2019, a formal and fully functional consulate general in Mumbai. Ireland and India have also shown their allegiance to fighting terrorism after the Pulwama attack. India has also hosted several Irish dignitaries on various occasions. These visits were directed toward engagement in business, education, health and tourism.
Further, many agreements were signed to provide opportunities for employment to people of both countries. Prime Minister Modi’s visit to Ireland helped revive relatively stagnant relations between these two nations. Several cultural and historically similar instances bind these two nations. From Yeats and Tagore to cricket and Diwali, the cultural semblance between these two nations has helped create a strong tie between them.
