what is Tariff

Tariff

A tariff is a tax imposed on imported goods by a government.

It raises the price of foreign products, making local goods more competitive in the domestic market.

🔹 Main Purposes

Protect local industries – Helps domestic companies compete with cheaper imports.

Raise government revenue – Governments earn money from import taxes.

Trade negotiation tool – Used to influence or balance trade between countries.

🔹 Types of Tariffs

Ad valorem tariff: A percentage of the product’s value (e.g., 10% of price).

Specific tariff: A fixed fee per unit (e.g., $5 per item).

Compound tariff: A mix of both ad valorem and specific tariffs.

🔹 Example

If a country sets a 10% tariff on imported cars, a $30,000 car would cost $33,000 after tax.

Tags:

#Tariff #Trade #Economy #ImportTax #GlobalBusiness

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