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Tariff rate quota: A trade policy tool used to
protect a domestically-produced commodity or product from competitive imports. A
tariff rate quota (TRQ) combines two policy instruments that nations
historically have used to restrict such imports: quotas
and tariffs. In a TRQ, the quota component works
together with a specified tariff level to provide the desired degree of import
protection. Imports entering during a specific time period under the quota
portion of a TRQ are usually subject to a lower, or sometimes a zero, tariff
rate. Imports above the quota’s quantitative threshold face a much higher
(usually prohibitive) tariff. Currently, TRQs apply to U.S. imports of certain
dairy products, beef, cotton, peanuts, sugar, certain sugar-containing products,
and tobacco.
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