What are tariffs?

Tariffs are defined as taxes imposed on imported goods. This means that when a country brings goods into its borders from another country, it may charge a financial levy on those products. The primary purpose of these tariffs is to raise revenue for the government and to protect domestic industries from foreign competition by making imported goods more expensive. When consumers face higher prices on imported goods due to tariffs, they may be more likely to purchase domestically produced items, thereby supporting local businesses.

While options discussing subsidies, taxes on exports, and shipping fees are related to international trade, they do not accurately define what tariffs are. Subsidies are financial support to exporters, which is separate from the concept of tariffs. Taxes imposed on exported goods are not tariffs; rather, they are export taxes, which are less common. Fees associated with international shipping refer to logistics costs, which do not encompass the definition of tariffs. Therefore, the correct identification of tariffs as taxes on imported goods is key to understanding trade policies and their implications on domestic and international market behavior.