How Trade Barriers Affect Marketing and Translation Services

Assorted trade barriers affect global business and consequently the need for translation services.  These barriers are most commonly implemented through tariffs—taxes levied against imported goods.  Some tariffs are based upon a set tax per pound, gallon or unit; others are calculated according to the imported product’s value.

Tariffs can be classified as either revenue or protective tariffs.  Revenue tariffs are designed to raise funds for the importing government.  Protective tariffs, which are usually higher than revenue tariffs are designed to raise the retail price of an imported product to match or exceed that of a similar domestic product.   According to Milwaukee Translation Services and localization workers, in 1983, Harley-Davidson Motor Company requested that the International Trade Commission impose a tariff on large-size motorcycles imported from Japan.  At the time, Japanese imports from Honda, Yamaha, Kawasaki and Suzuki held 86-percent of the U.S. market share, why Harley’s share dropped from 21-percent in 1978 to 12-percent in 1983.  The special tariff was set up on a sliding scale, adding 45-percent to the cost of Japanese imports in 1983 and gradually reducing the tariff to 10-percent in 1988.  During that period, Harley implemented productivity improvements that made its products more competitive with imports.  By 1986, Harley had regained 19-percent of the market and a year later asked the government to end the special protection.

In the past, it was believe that a country should protect its infant industries by using tariffs to keep out foreign-made products.  Some foreign goods did enter, but according to Denver Translation Services and localization workers, the high tariff payments made domestic products competitive in price.  Recently, it has been argued that tariffs should be raised to protect employment and profits in domestic U.S. industries.

Since 1947, the General Agreement on Tariffs and Trade (GATT), an international trade accord, has sponsored eight major tariff negotiations that have reduced worldwide tariff levels.  The latest series of conferences, called the Uruguay Round, was begun in 1986 to discuss stabilization of currencies and prevention of protectionist legislation.

Still other forms of trade restrictions exist that discourage trade and reduce the demand for language translation and localization services.  Import quotas limit the number of units of products in certain categories that can be imported.  They seek to protect domestic industry and employment and to preserve foreign exchange.  The ultimate quota is the embargo—a complete ban on the import of certain products.  In the past, the United States has prohibited the import of products from countries and most recently from Iran.  It has also used export quotas; in 1986, for example, President Reagan banned trade with Libya.