A tariff is a taximposed by a government on goods and services imported from other countries, and occasionally on exports. The primary purposes of tariffs are to protect domestic industries from foreign competition, generate government revenue, and serve as a tool in trade negotiations.
Types and Function
Tariffs can be specific (a fixed fee per unit) or ad valorem (a percentage of the product’s value).They increase the price of imported goods, making them less competitive compared to local products, which can shift consumer demand toward domestically produced goods.