Understanding Tariffs in International Trade

Tariffs — The Price of Protection in International Trade Imagine this: a country wants to

protect its local farmers from cheaper imported food. So, it adds a fee to

foreign goods — making them more expensive to buy. That fee is called a tariff,

and it’s one of the oldest and most debated tools in international trade. A tariff is a tax

on imports or exports. Most of the time, it’s applied to goods coming into a country.

The goal? To make foreign products more expensive — and encourage consumers to buy

domestically produced goods instead. Let’s say imported steel costs $100 per ton.

If the government adds a 20% tariff, that same steel now costs $120. Local producers