Tariff peak
Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
A tariff peak is an unusually high tariff on a particular sensitive product, typically above 15%, in a country where most other tariffs are low. Peaks usually protect politically sensitive sectors such as farm goods or processed foods. They can block exports from developing countries even when average tariffs look low.
Example
Take a country with low duties on most goods but a 30% duty on chocolate. That 30% is a tariff peak. In India, Budget 2025-26 cut the number of customs tariff slabs and moderated some peak rates.
Don't confuse with
- Tariff escalation: this is duties rising step by step from raw material to finished product. A tariff peak is a single very high duty, whatever the stage of processing.
Related concepts
- Tariff
- Ad valorem tariff
- Specific tariff
- Compound tariff
- Mixed tariff
- Export duties
- Duty drawback
- Tariff escalation
- Effective rate of protection
- Bound tariff rate