MAKING TARIFFS MAKE SENSE

A tariff is a tax that a country places on imported goods, making them more expensive. This tax is paid by the company importing the goods, which may then pass the extra cost on to consumers through higher prices. Tariffs are used by governments to raise money and to protect their domestic industries from foreign competition by making imports less attractive to buyers.

How Tariffs Work

When a foreign product enters a country, the importer pays the tariff to the government, increasing the total cost of the product.

Purpose of Tariffs

• Revenue: To generate income for the government (and the country).

• Protection: To protect domestic industries by making imported goods more expensive and less competitive, encouraging consumers to buy domestically produced goods instead.

  
  

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As a Tax

A tariff is a tax on products that cross national borders, such as a tax on imported cars or steel.

What to expect.

• Increase in operational costs for businesses.

• Increase in prices for consumers.