Gap Tariff System

Gap Tariff System
2006.12.07 3:54

This is one of the effective protectionist's measures.
Usually domestic products are more expensive than foreign goods, so our government impose the higher tariff on import goods so as to protect the benefit of domestic industry. For example, Scotch, Bourbon are much cheaper than domestic conterpart. To make matters better, the taste is also better. So Japanese people are willing to buy Scotch, Bourbon. Therefore gap tariffs exist. Owing to the gap tariff system, people buy any whiskies indiscriminately.The price of both whiskies are almost the same.
It is easily recognisable if they were the cases of liquor, chocolate, etc., but in the case of pork, it is just hard to distinguish between domestic pork and imported one. So if the importer says this pork is domestic one pointing to imported pork, everyone can't help trusting that the one is domestic. Thus they didn't have to pay 'gap tax' that was supposed to pay. They saved 150 million dollars. But they didn't keep it in their safe, they reflected it on the price of pork and the pork they sell has been kept at low price.
Who was most benefitted? Consumers were. The head of company was arrested, but the Department of Agriculture started considering the change of the law.