What do you mean by Safeguard Tariff?

Explain Safeguard Tariff?

 

Safeguard Tariff

A WTO member may limit imports of a product temporarily as to take “safeguard” action if its domestic industry is harmed or threatened with injury caused by a surge in imports of similar or directly competitive products.

In other words, a safeguard measure is a temporary tariff or quota used to shield a domestic industry from foreign exporters. This tariff is imposed so as to guarantee that imports in excessive amounts do not hurt the domestic industry. When imposed, a safeguard measure should be applied only to the extent necessary to prevent or remedy serious injury and to help the industry concerned to adjust.

These measures don't neutralize an unfair practice; however enable countries to suspend import surges temporarily in order to allow local industries time to adjust in accordance with increased foreign competition on national markets.

WTO permits, through its safeguard clause, to impose temporary and nondiscriminatory Safeguards measures on imports that are making injury to domestic producers.

A safeguard measure should not last more than four years, although this can be extended up to eight years, subject to an assurance by competent national authorities that the measure is required and that there is evidence that the industry is adjusting.

 


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