International markets are important for many United States agricultural products. Trade agreements with various countries have provided new market opportunities for United States producers. However, international trade can be a confusing and challenging area of the law to understand. The laws surrounding the export and import of agricultural products often change because of new and existing trade agreements that the United States has with other countries.

This article is the first in a series that the National Agricultural Law Center will publish discussing different areas of international trade. This article will focus on one of the basics of international trade, tariffs.


In simplest terms, a tariff is a tax. Tariffs are paid to the customs authority of the country imposing the tariff. For example, tariffs on imports coming into the United States are collected by Customs and Border Protection, acting on behalf of the Commerce Department. Countries apply tariffs to protect domestic industries against price competition from imports.

The number of tariffs imposed is higher on agricultural goods than on non-agricultural goods in more than 90 percent of countries. Additionally, the tariffs that are imposed on agricultural goods tend to be a higher percentage than those on non-agricultural products. For example, USDA’s Economic Research Service study found that South Korea’s tariff on agricultural goods averages just over 79 percent compared with almost 4 percent for non-agricultural imports. Tariff rates on agricultural products are typically higher than tariffs on manufactured products because high tariff rates on agricultural products have been used to protect domestic agriculture from foreign competition.

With tariffs playing such a prominent role in international agricultural trade, it is important to understand that different types of tariffs can be imposed. These include specific tariffs, ad valorem tariffs, compound tariffs, tariff-rate quotas, and retaliatory tariffs.

Specific Tariffs

A specific tariff is a tax imposed directly onto one imported good and does not depend on the value of that imported good. A specific tariff is usually based on the weight or number of imported goods. This tariff can vary according to the type of goods imported. A large portion of agricultural goods falls into the specific tariff category. For example, to import squash into the United States, the general specific tariff imposed is 1.5¢/kg of the amount of squash being imported.

Ad Valorem Tariffs

The term “ad valorem” is Latin for “according to value,” this type of tariff is set based on a percentage of what the good is worth. A good way to differentiate between ad valorem tariffs and specific tariffs is to look at how they are listed. Ad valorem tariffs will be listed as percentages, while specific tariffs will be listed as a price per quantity. For example, spinach has an ad valorem tariff rate of 20%. If one kilogram of spinach costs $3.00, the import cost imposed by the tariff would be $0.60.

Compound Tariffs

A compound tariff is a combination of an ad valorem and specific tariffs. It imposes a tax on imported goods based on the number of imported goods and their value. To determine if the tariff imposed is a compound tariff, the tariff imposed will have both a price per quantity and a percentage. For example, to import mushrooms into the United States, the importer will have to pay 8.8¢/kg plus 20% of their value.

Tariff-rate Quota

A tariff-rate quota goes a step further than a single tariff on its own. A tariff-rate quota combines both tariffs and quotas to set the tariffs on the imported good. This type of tariff works by setting a lower tariff on imported goods up to a certain amount of the good (the quota) and then increasing the tariff once that amount is reached.

A good example of a tariff-rate quota can be found in the United States-Mexico-Canada Agreement (“USMCA”). Under the USMCA, Canada agreed to tax-free or lower tariffs for dairy imports within a certain quota. After that quota was met, Canada would apply a higher tariff. The USMCA allows Canada to impose these tariff-rate quotas on 14 types of dairy products, including milk, cheese, and ice cream. However, there was a recent dispute about whether Canada was upholding its end of the USMCA. The United States brought a challenge under the USMCA, arguing that Canada had not been properly applying the tariff-rate quota to dairy exports from the United States. Canada’s current system allocates 85%-100% of dairy imports within the tariff-rate quota to processors who turn raw milk into dairy products or incorporate dairy products into other products.

The dispute-settlement panel found that Canada was limiting access to their dairy market from anyone other than processors by following their current allocation system. Meaning that producers, United States dairy farmers, were limited in their access to the Canadian dairy markets in violation of the USMCA. Even though the dispute settlement panel found that Canada was violating the USMCA, it is not required to make any changes to the way it applies its tariff-rate quotas. However, the United States can start imposing import restrictions on Canada, such as retaliatory tariffs discussed below. For more information on the USMCA in general, click here.

Retaliatory Tariffs

Another important type of tariff is the retaliatory tariff. In the United States, the Trade Expansion Act of 1962 gave the president the power to impose import restrictions if a certain import is found to threaten national security. The Trade Act of 1974 also allows the United States Trade Representative (“USTR”) to impose import restrictions if their investigation determines that other countries’ conduct is unfair or in violation of existing trade agreements.

A common import restriction comes from increasing the tariff of certain goods. Retaliatory tariffs are different from the other types of tariffs mentioned in this article because they are the results of trade strategy rather than just a simple tax. Essentially, a retaliatory tariff is a tariff imposed solely to punish another country for its trade practices.

A recent example of retaliatory tariffs in action is the “trade war” with China. In March of 2018, President Trump announced that tariffs on steel and aluminum imports would be 25% and 10%, respectively. Later that same year, more tariffs were imposed by the USTR on imports from China. China retaliated by imposing its own tariffs on a wide range of United States goods, including agricultural products. In April 2018, China implemented its own retaliatory tariffs of 15% or 25% on hundreds of imports from the United States, including United States food and agricultural goods. In 2020, the United States and China reached the China Phase One agreement. As part of the agreement, the United States agreed to modify the retaliatory tariffs imposed by the USTR. More information about the China Phase One Agreement can be found here.


Tariffs are implemented by countries all around the world. Certain countries enjoy tariff-free trade, some countries receive a preferred tariff rate, and others may be subject to higher tariffs, all for the same good. For a more in-depth look at the tariffs imposed by the United States on imported goods, the Harmonized Tariff Schedule is available. The United States International Trade Commission (“USITC”) publishes the tariffs schedule (the specific cost of importing goods) each year. The next article to be published as part of this series will focus on non-tariff barriers to international trade such as sanitary and phytosanitary measures, embargoes, and licenses.


To view the United States Harmonized Tariff Schedule, click here.

For more National Agricultural Law Center resources on International Agricultural Trade, click here.

For an overview of the USMCA, click here.

For an overview of the China Phase One Agreement, click here.