TARRIFFS Meaning and
Definition
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Tariffs are a form of tax or duty imposed on goods and services that are imported or exported between countries. These charges are typically levied by the government and are considered a part of its trade policy. The purpose of tariffs is multifaceted and can vary depending on the specific economic and political objectives of a nation.
One of the main functions of tariffs is to protect domestic industries from competition. By imposing tariffs on imported goods, governments aim to make foreign products more expensive and less competitive, thereby encouraging consumers to purchase goods produced domestically. This protectionist measure can help shield domestic industries from uneven competition, prevent job losses, and stimulate local economic growth.
Another objective of tariffs is revenue generation. Governments often rely on the revenue generated from tariffs as a source of income for their budgets. By imposing taxes on imported goods, governments can collect revenue and fund various public services and infrastructure projects.
Additionally, tariffs can be used as a tool of economic policy to correct trade imbalances and promote national economic interests. Governments may strategically impose tariffs to negotiate more favorable trade deals, address unfair trade practices, or protect national security by reducing reliance on certain imports.
However, tariffs are often criticized for their potential negative impact on consumers. Higher prices resulting from tariffs can reduce consumer purchasing power, limit choices, and lead to inflationary pressures. Furthermore, tariffs can spark trade disputes and escalate into trade wars as countries retaliate against each other's protectionist measures.
Etymology of TARRIFFS
The word "tariffs" has its roots in the Italian word "tariffa", which is derived from the Arabic word "ta'rīf". "Ta'rīf" means a list of prices or rates, specifically referring to customs duties imposed on goods being imported or exported. The term was later adopted into English as "tariff" to denote the taxes or duties placed on goods during international trade.
