trigger price

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Trigger Price

A price at which an import causes the importing country automatically to impose a tariff or quota. For example, a country may have a law stating that if an import falls below $10 per unit, a tariff is imposed that results in the import becoming $13 per unit. Trigger prices are used when the importing country generally wishes to promote free trade but does not want importers to undercut domestic industry.

trigger price

The specific price of an imported item below which a quota or tariff will be put into effect. A trigger price is imposed to keep foreign competitors from undercutting prices charged by domestic companies in the domestic firm's home market.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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Freed of the need for tariffs to finance central government programs, the United States and other industrialized nations have developed new and more sinister means for manipulating international commodity markets, including voluntary export restraints, orderly market arrangements, and trigger price mechanisms. Lake's framework can accommodate those innovations in protectionism but it cannot explain them or other innovations that may arise in the future.

Power, Protection, and Free Trade: International Sources of U.S. Commerical Strategy, 1887-1939

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