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Tariffs raise money for a government, like any other tax, and affect how expensive and, therefore, competitive goods are. Countries usually charge much higher import tariffs than export tariffs to make foreign goods coming into the country more expensive relative to domestic goods; exports, on the other hand, are usually only taxed if the item being exported is scarce — such as teak in Thailand — or very expensive and highly regulated, such as diamonds in Angola.
The U.S. charges relatively low tariffs because it's one of the most vocal champions of free trade in the international arena. Free trade literally means the abolition of trade barriers such as tariffs. However, while the U.S. frequently advocates for free trade through the World Trade Organization, or WTO; the International Monetary Fund, or IMF; diplomatic
channels; and other venues, actual policies prefer looser regulations and strategically low tariffs, as opposed to no tariffs.
Free Trade Agreements
Through a series of free trade agreements, the U.S. has abolished a majority of tariffs for about a dozen trading partners, namely Australia, Canada, Israel, Japan, Mexico, Peru and Singapore. For these countries, tariffs for most items are nonexistent, with some exceptions. For example, most agricultural products or products made from raw materials such as cotton simply receive a discounted tariff.
All duties on all products are detailed in the HTS, which is updated annually. More than 100 countries use the HTS classification system, which lists items by internationally recognized codes. The HTS is divided by type of product into 97 chapters, including “Zinc and Articles Thereof” and “Cars, Trucks, Tractors and Other Types of Motorized Vehicles."