A tax a government charges on goods coming in from another country.
A tariff is a tax imposed on imported goods, paid at the border by the company bringing the goods in, not by the foreign country selling them, a common point of confusion. The immediate effect is that imported goods get more expensive, which can protect domestic industry from cheaper foreign competition, but it also tends to raise costs for any business or consumer who relies on those imports. Tariffs are as much a political tool as an economic one, and a new one announced can move currency, stock, and commodity markets within hours.
Part of the Open Bell Glossary — plain-English explanations of the terms that come up on the show. Browse every term.