Tariff
Quick Definition: Tariff
A tariff is a tax or duty that a government charges on imported goods (and sometimes on exported goods). It is used to raise revenue, protect domestic industries, or influence trade policy.
Key points:
- Tariffs can be ad valorem (a percentage of value) or specific (a fixed amount per unit).
- The importer generally pays the tariff at the border, which is often passed on to consumers via higher prices.
- Tariffs may provoke retaliation, distort trade flows, and create economic inefficiencies.
