Unrealistic is Trump’s pledge to impose 100% import taxes on Brics countries: GTRI

If the BRICS group replaces the US currency, US President-elect Donald Trump’s threat to slap 100% customs tariffs on the member nations is impossible. Created in 2009, BRICS is the only significant international organization that does not include the United States. 

The UAE, Ethiopia, Egypt, Iran, and South Africa are among its other members. Some of its members—China and Russia in particular—have been looking for a substitute for the US dollar or developing their own BRICS currency in recent years. India has not yet participated in the initiative.

Tariffs of this magnitude, according to the Global Trade Research Initiative (GTRI), would only hurt US consumers since they would raise import costs, impede international trade, and expose the country to retaliation from important trading partners.

The wise course of action for India is to concentrate on creating a transparent and open currency exchange to make local currency trading feasible, according to GTRI Founder Ajay Srivastava. India can better handle the changing dynamics of international trade by improving its own financial infrastructure. Neither the dominance of the US dollar nor the complete adoption of a BRICS currency at this time, he argued, are in India’s best interests.

Although it is not the only currency used abroad, the US dollar accounts for more than 90% of transactions in international trade. The US has not objected to the use of other convertible currencies, such as the British pound, the euro, and the Japanese yen, which are also essential to international trade.

Import Duty: What Is It?

The fee that a nation’s customs authorities collect on imports and some exports is known as import duty. The import duty is typically determined by the value of the commodity. Import duties can also be referred to as customs duties, tariffs, import taxes, or import tariffs, depending on the situation.

Global Institutions

Import taxes are directly impacted by a number of international organizations and treaties. To support free trade, several nations have attempted to lower duties. The World Trade Organization (WTO) encourages and upholds tariff reduction pledges made by its member countries. The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is another illustration of a global initiative to lower tariffs.

Documentation for Import Duty

You will require a number of documents in order to pay import duties. Since it describes the buyer-seller transaction, the commercial invoice is an important document. This will cover the terms of sale, the goods’ worth, and other pertinent details.

The bill of lading, also known as the airway bill, is an additional document that functions as a shipping receipt. Airway bills are used for air shipments, and bills of lading are used for maritime shipments. 

Additionally, import duties are paid using the packing list. The number, weight, and measurements of the commodities are broken down in depth in the list. The certificate of origin and any appropriate licenses or permits are among the other documents that can be needed. The nation in which the goods were produced is confirmed by the certificate of origin. Certain limited or regulated commodities may require licenses and permits.

How to Determine Import Duties

The value of the imported items determines the import duties. This covers the price of the products as well as delivery and insurance. These products offer a thorough assessment of the entire cost of shipping the goods to the importer’s nation. 

The country of origin and any current trade agreements between the importing and exporting nations are additional variables that may affect the import duty rate. Let’s take the case of a US corporation that buys gadgets from China. The shipment is worth $50,000 when the cost of the electronics, delivery, and insurance are taken into account. The duty rate for this category is 5%, under the U.S. tariff schedule.

The Bottom Line

Governments impose import charges as fees on items entering their nations in order to safeguard domestic businesses, increase revenue, and regulate commerce. The value and classification of the items determine these duties, and the rates and laws vary greatly by nation and product category.