Definition
Tariffs may be designed to raise revenue, protect domestic producers, respond to trade practices, or pursue strategic goals.
Political Dictionary
Tariff
A tariff is a tax imposed on imported goods.
Why It Matters
They affect consumer prices, supply chains, domestic production, government revenue, and international relations.
How It Works
Customs authorities collect the tariff from importers when covered goods enter the country.
History
Tariffs were a major source of federal revenue before the income tax and have repeatedly shaped U.S. trade policy.
Example
A tariff on imported steel raises the cost of bringing foreign steel into the United States.
Common Misconceptions
- Foreign governments always pay the tariff directly.
- Tariffs affect only imported firms.
- A tariff guarantees domestic job growth without costs.
Related Terms
- Free Trade
- Protectionism
- Trade Deficit
- Imports
- Customs
Related Topics
See Also