Effects of Tariffs

Introduction

When a country engages in trade, the government of that country will build various barriers to restrict trade. The most common of these barriers are taxes levied on the importation (may also be levied on exports as well as imports) of foreign goods. These taxes, commonly reffered as tariffs, are simply a form of commodity taxation. There may be several reasons to levy taxes on trade. For example, a government can use tariffs to protect the operations of domestic industries that compe...