Tariff
Intermediate Level
Global
International Trade
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Definition
A tax imposed on imported goods and services, designed to protect domestic industries or generate revenue.
Detailed Explanation
Tariffs increase the cost of imported goods, making domestic products more competitive. They can lead to trade wars. WTO governs international tariff rules. Types include specific tariffs (fixed amount) and ad valorem (percentage).
Example
A 25% tariff on imported steel makes foreign steel more expensive than domestic production.