Tarrifs and it's impacts on Trade and Economy

Tarrifs and it's impacts on Trade and Economy Tariffs: Meaning and Their Impact on Trade 📌 Introduction Tariffs are one of the oldest tools of economic policy. Governments use them to regulate trade between countries, protect local industries, and generate revenue. In today’s globalized economy, tariffs have become a central issue in trade wars, international negotiations, and business strategies. Understanding tariffs is essential for grasping how global trade functions. What Are Tariffs? A tariff is a tax imposed by a government on imported (and sometimes exported) goods. It increases the cost of foreign products, making them more expensive in the domestic market. Tariffs are usually charged in two forms: Ad Valorem Tariff – A percentage of the value of the goods (e.g., 10% tax on the import price). Specific Tariff – A fixed fee based on quantity (e.g., $100 on every ton of steel). Objectives of Tariffs Governments impose tariffs for several reasons: Protec...