The customs duties are rates who pay to sell goods in a country other than that in which they were produced. In these days they are on everyone’s mouth due to the rates announced by the President of the USA Donald Trump During the so -called “liberation day” of April 2, 2025. The duties are one of the main measures of protectionismbecause they serve to “protect” national industries from foreign competition. Their effects, however, are heterogeneous and, in some cases, have caused more damage than benefits. The duties exist from the ancient world. Over the centuries, periods have alternated in which the protectionism prevailed and periods in which the free trade. After the Second World War, Western countries went to a progressive reduction in customs duties, which however was interrupted in some moments due to economic crises or political interests.
What are customs duties
Customs duties are taxes that they pay to import goods in a certain country. Let’s take an example. I am a trader and I want to import in my country of the T -shirts, which I buy abroad at a cost of 10 euros each. T -shirts are produced in my country for 18 euros. So, if I put on the market the shirts I bought with a price, for example, of 15 euros (calculating the transport costs, my profit, etc. in addition to the 10 euros of the purchase), will be attraction for consumers. However, we admit that my country adopts customs rates of 50%. In this case I will have to pay 5 euros for each shirt that amount and, of course, I will have to download the cost on the consumer. With the duty, therefore, I should sell the shirts for 20 euros: 10 euros of the purchase cost, 5 for expenses and profit, 5 for the duty. The 20 euro shirt would not be competitive if similar goods are produced in the country that cost 18 euros. Consumers would buy national productions.
Generally, the duties are useful for developing industrial systemswhich cannot hold up the competition of foreign industries which, being better organized, have lower production costs and sell goods at lower prices.
Protectionism, however, also has negative effects: If a state imposes duties, in all likelihood other countries will also make the same and therefore companies will have more difficulty exporting their products. In addition, duties can damage consumersreducing the availability of goods on the market and causing prices to rise.
The duties are the most common measure of economic protectionism, that is, policy aimed at promoting national industries. The system opposite to protectionism is the liberalism (or free trade), which provides for the freedom of commerce and the demolition of customs barriers.
Duties in the ancient and Middle Ages world
Protectionism already existed in the ancient world: the Greek city They made a fee pay for the goods sold in their territory and, often, also for those who passed there. Even in the Roman Empire, taxes and tolls for the transit of goods were very frequent.
Similarly inmedieval economy Protectiveness prevailed. As we know, in the Middle Ages the territory was fragmented in numerous political entities. For example, in the centuries after the year 1 000 a vast sector of the Italian peninsula was divided into city-states (the municipalities, which later became lordships). In these cases, a tax was paid not only for the import, but also for the transit of goods on the territory of each city.
Customs policy from mercantilism to capitalism
The protectionist policy remained in force, in different measures and forms, throughout the modern age and was applied even after the affirmation of a new economic model, the mercantilismdeveloped in the 18th century. In the mercantistic system, the main task of the states was to keep the commercial balance in active, exporting more than it imported, and the customs tariffs on incoming goods were high.
In the following century, however another system affirmed itself: the capitalismbased on the private initiative. In a hypothetical pure capitalist system, the states do not intervene in the economy and let the market self -employed. In fact, all economic systems provide some form of public interventionmore or less extended as appropriate. It is true, however, that capitalism caused one reduction of customs ratesespecially in the period after 1840.
Many states returned to protectionism after 1873when a serious economic crisis began throughout the West, which ended in 1896. Only the United Kingdom, which was the main commercial power of the time, continued to practice free trade.
The crisis of ’29 and protectionism
In the early 1900s, many countries The customs duties reducedalso because the tax system was encountered an evolution and states also guaranteed other sources of income. However, in correspondence with the economic crisis of 1929, numerous countries decided to increase rates again. In the United States, for example, in 1930 it entered into force Smoot – Hawley Tariff Actwhich established high duties on numerous goods. The effect, however, was not the one hoped for: the economists support almost unanimously that the duties worsened, instead of alleviating, the damage caused by the crisis.
The second post -war period: free trade and neoprotheisticist thrusts
After the Second World War, due to the experience of previous years, Western countries do they launched towards free trade. In 1947 an international organization was born, the Gatt (General Agreement on Tariffs and Trade – General agreement on customs rates and trade), consisting of 23 countries, which aimed to reduce duties. In 1995 the Gatt was replaced by WTO (World Trade Organization – World Commerce Organization), which pursues similar purposes. In addition, the governments of some countries decided to completely break down the customs barriers in specific geographical areas. Among the European countries, for example, in 1969 the Single marketstill existing today, which canceled the duties.
However, even after the Second World War there were no lack of attempts to return to protectionism: This is what happened after the oil shocks of the 70s, after the 2008 crisis and is also what has been happening for some years.
Useful or harmful: the effects of customs duties
It is impossible to give a valid answer for all circumstances. The effect of customs rates change depending on Villagesfrom the economic conditionsof theprudness with which they are introduced and other factors. In principle, in many cases the rates are served to protect developing economies from the competition of the most advanced countries, strengthening the internal market of the countries that imposed the duties. However on other occasions, as after the 1929 crisis, they had effects contrary to the desired ones And they caused economic and social damage. There are many economists according to which the negative effects of duties in some circumstances exceed the positive ones. Even today, the duties entered into force in the United States by decision of President Trump, according to some analysts could damage the country that introduced them.
