MFN Tariff

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MFN Tariff

A tariff applied to a country with most favored nation status. An MFN tariff is the lowest possible tariff a country can assess on another country. For example, if a country's lowest tariff is 2% of the value of a good, this is its MFN tariff, and it charges this percentage on an import from a country with most favored nation status. Members of the World Trade Organization are required to extend most favored nation status to other members, though exceptions exist. In the United States, most favored nation status is formally called permanent normal trade relations.
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In addition, North American trade pressures could also rise due to a cancellation of the North American Free Trade Agreement (NAFTA) and the resumption of most favored nation tariffs among Mexico, the US and Canada under WTO rules.
Some differences in the most favored nation tariffs of the NAFTA countries are quite large Product Canada United States Mexico Percent Chickens, uncut (fresh or chilled) 238.0 * 3.5 234.0 Butter 298.5 * 35.3 * 20.0 Cheddar cheese 245.5 * 24.0 * 125.0 Durum wheat 0.4 ** 1.30 67.0 Barley 0.4 ** 0.40 115.0 Potatoes 1.0 1.80 245.0 Raspberries Free Less than 0.05 20.0 Raw sugar (cane or beet, solid form, not containing added flavoring or coloring) 9.3 91.5 * 73.5 Strawberry jam 12.5 2.2 51.0 Peanuts (shelled) Free 131.8 * Free * = Over-quota tariff ** = In-quota tariff.
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