Why Would A Tariff Be Used: Exploring Trade Policy Strategies

Why are tariffs employed? Tariffs serve as a multifaceted tool for governments, fulfilling dual purposes of revenue generation and safeguarding domestic industries. These levies, which are essentially taxes on imported goods, generate income for the government while simultaneously shielding local businesses from foreign competition. By raising the cost of imported products, tariffs inherently make domestically produced goods more economically appealing to consumers in comparison to their imported counterparts. This strategy aims to nurture and bolster domestic industries by creating a competitive advantage for them in the marketplace, ultimately fostering economic growth within the country.