PROTECTIVE TARIFF Meaning and
Definition
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A protective tariff refers to a government-imposed tax or duty placed on imported goods or products with the purpose of shielding domestic industries and businesses from foreign competition. Its primary objective is to protect the local economy, maintain and develop home industries, and strengthen the overall economic well-being of the nation.
The protective tariff is primarily designed to make foreign goods more expensive and less competitive compared to domestically produced goods. By increasing the prices of imported goods, local industries can flourish by capturing a larger share of the market. This provides a level-playing field for domestic producers, encouraging domestic production, employment, and economic growth.
Typically, protective tariffs are implemented on goods that can be produced domestically but are being imported at significantly lower prices due to various factors such as lower labor costs, economies of scale, or subsidies provided by foreign governments. The tariff acts as a barrier, making the imported goods relatively more expensive and encouraging consumers to choose locally manufactured goods.
However, protective tariffs can also be subject to criticism. Opponents argue that they can lead to retaliation from other countries, causing a trade war and potentially harming global economic relations. Additionally, protective tariffs may lead to higher prices for consumers as they limit access to cheaper imported goods and reduce competition in the market.
Overall, a protective tariff is a trade policy measure aimed at safeguarding domestic industries by imposing taxes on imported goods, thereby promoting economic growth and providing opportunities for local businesses to thrive.
Common Misspellings for PROTECTIVE TARIFF
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- prorective tariff
- profective tariff
- progective tariff
Etymology of PROTECTIVE TARIFF
The word "protective tariff" has its etymology derived from a combination of the noun "tariff" and the adjective "protective".
The noun "tariff" comes from the Arabic word "ta'rīf", which literally means "notification" or "listing". It entered the English language via the Italian word "tariffa" in the late 16th century, referring to a table of duties or charges imposed upon certain goods when imported or exported.
The adjective "protective" comes from the Latin word "protectus", the past participle of "protegere", which means "to shield" or "to protect". It originated from the combination of the prefix "pro-" (meaning "forward" or "forth") and the verb "tegere" (meaning "to cover").
Similar spelling words for PROTECTIVE TARIFF
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