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Tariff is a tax imposed on imported goods and services.

Tariff is a tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. A specific tariff is levied as a fixed fee based on the type of item.

For example, $1,000 on any car. And an ad-valorem tariff is levied based on the item’s value. For example, 10% of the cars value. Tariffs provide additional revenue for governments and domestic producers at the expense of consumers and foreign producers. They are one of several tools available to shape trade policy.

Governments may impose tariffs to raise revenue, or to protect domestic industries from foreign competition, since consumers will generally purchase foreign produce goods when they’re cheaper.

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Fundamentals of Economics

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