What is a Tariff
Subject: Economics | Topics:

In simplest terms, a tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact.

Tariffs are usually implemented when the world price of a good is lower than the domestic price of a good. A tariff thus is a form of protection from foreign competition that can produce that good at a cheaper price. The jobs of that industry are thus protected by the tariff, as opposed to the jobs being eliminated by foreign competition. This makes consumers outside the industry lose because they have to pay a higher price for that good.

A tariff may be accessed directly, at the border, or indirectly, by requiring the prior purchase of a license or permit to import specified quantities of the good. Examples of tariffs include transit duties and import or export taxes, which may be levied on goods passing through a customs area en route to another destination. In addition to providing a source of revenue, tariffs can effectively protect local industry by driving up the price of an imported item that competes with domestic products. This practice allows domestic producers either to charge higher prices for their goods or to capitalize on their own lighter taxes by charging lower prices and attracting more customers.

What is a Tariff

Related Economics Paper:

Popular Economics Paper:

Report on Economic Development in Bangladesh

Introduction The major objectives of planned development have been increased national income, rural development, self-sufficiency in food, and increased industrial production. However, progress in achieving development goals has been slow. Political turmoil and untamed natural hazards of cyclone .....

Report on The Contribution of Garments Industries in Bangladesh Economy

INTRODUCTION The shift from a rural/agro based economy to an urban/industrial economy is an essential part of the process of economic development. Although policymakers in the least developed countries (LDCs) have, at various times, attempted to make agriculture the primary engine of economic gro.....


E-commerce Concept E-commerce is a narrower part of e-business dealing with the purchase and sale of goods and services over the internet, including support activities such as marketing and customer support. The ability to made transaction for personal or professional use over the internet is kno.....

Assignment on Rostows Development Model and Bangladesh

Rostows Development model Creator: Walt Whitman Rostow 1916-2003 was an American economist who proposed his five stage model of development in the 1950’s, the ideas of which stemmed from modern free trade and Adam Smith. Rostow’s model does not deny John Maynard Keynes in that it allows for a.....

Assignment on Bangladesh Economy: The Challenges and Prospects

Bangladesh is an agricultural country. With some three-fifths of the population engaged in farming. Jute and tea are principal sources of foreign exchange. Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly .....