Question

Why are tariffs imposed?

Answer 1

Tariffs are imposed to make imports from foreign countries relatively expensive compared to domestic goods, thereby indirectly discouraging imports. These are imposed to provide a safe and protective environment for infant domestic firms from their technologically advanced foreign counterparts. Tariffs facilitate domestic firms' survival and growth. Tariffs are also imposed on goods the government considers socially undesirable and on imports that will impose an unnecessary burden on scarce foreign exchange reserves.

Answer 2

Tariffs are taxes on imports imposed to protect domestic industries from foreign competition, to raise revenue, to correct trade imbalances, and to retaliate against unfair practices. By raising import prices, tariffs encourage local production, safeguard jobs, and influence trade negotiations.