Understanding Tariffs

A type of income tax

A subsidy given to exporters

A tax imposed on imported goods

A fine for non-compliance with trade laws

Promote exports

Increase foreign competition

Raise government revenue and protect domestic industries

Encourage foreign investment

A fixed amount charged per unit of imported good

A percentage of the value of the imported good

A tax on domestic goods

A variable tax rate on luxury goods

A tax on services only

A fixed charge on each good

A tax based on the value of the imported good

A quota on exports

Increase in domestic production

Decrease in imports

Fall in government revenue

Increase in prices of imported goods

Domestic consumers

Foreign producers

Domestic producers

International traders

Decrease in cost of living

Higher efficiency due to competition

Trade wars between countries

Increased foreign direct investment

Decrease domestic employment

Improve the balance of payments

Discourage domestic production

Increase foreign dependency

It is imposed to raise revenue for the government

It protects domestic industries from foreign competition

It is used to control inflation

It regulates exports

Lower prices for consumers

Greater variety of imported goods

Inefficiency in domestic industries

Enhanced consumer surplus