What is a tariff?

A tariff is defined as a tax imposed on goods imported from another country. This financial charge is typically levied by the government to regulate international trade. By applying tariffs, a country can make imported goods more expensive compared to local products, which can encourage consumers to buy domestically produced goods. This tool is often used to protect domestic industries, enhance national revenue, and sometimes to respond to unfair trade practices from other countries.

The concept of tariffs is critical in understanding trade policies and economic strategies, as they can significantly influence market dynamics, pricing, and competition both locally and internationally. Understanding tariffs is essential for businesses engaged in international trade, as they directly impact cost structures and pricing strategies.