Why are additional duties sometimes imposed on imports?

Additional duties on imports are typically imposed to address unfair trade practices or to protect domestic industries. This practice is often implemented through measures such as anti-dumping duties or countervailing duties.

When a foreign company sells goods in the domestic market at a price lower than their market value, it can undermine local businesses and disrupt market equilibrium. By imposing additional duties, the government aims to level the playing field, ensuring that domestic producers can compete fairly against foreign imports. This is integral to maintaining the economic integrity of local industries and preventing job losses that could arise from unfair competition.

Moreover, such duties serve as a tool for trade policy, allowing governments to respond to practices that violate fair trading norms, thus encouraging compliance with international trade agreements. This approach contributes to a balanced trade environment where domestic manufacturers are afforded a degree of protection and sustainability.