What are tariffs and why are they used?

Tariffs are a tax a government puts on good which are imported into a country. This increases the price per unit of the imported good and is often used by governments o attempt to encourage individuals to purchase domestic goods rather than imported ones, thus protecting domestic industries. Another reason governments impose tariffs is so that they can extract taxation from it and thus increase their revenue. In this day and age tariffs often have negative connotations, as shown during the current Sino-US trade war in which the two countries are constantly raising tariffs on certain goods of each other in order to attempt to protect their own economies. Perhaps the first time we really saw tariffs used on a widespread scale would have been during the USA's great depression in which they raised tariffs on imported agriculture and manufactured products, leading to other countries also raising the tariffs on them.

NF
Answered by Nathan F. Economics tutor

2095 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain the effects of increased Tariffs on goods from the UK


Evaluate the role of buffer stock systems


Define what a Demerit Good is and explain why they are often over-consumed in the free market.


How should I structure the long answers in the exam?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning