A tariff
A tariff is similar to a tax your nation imposes on goods imported from overseas. Suppose you order a coat from a foreign nation—when you get it, customs tells you, "Okay, you can have it, but you owe us ₹500 extra." Purpose: Raise the price of foreign things so native products are more attractive.Read more
A tariff is similar to a tax your nation imposes on goods imported from overseas.
Suppose you order a coat from a foreign nation—when you get it, customs tells you, “Okay, you can have it, but you owe us ₹500 extra.”
Purpose: Raise the price of foreign things so native products are more attractive.
Result: You can still purchase as much as you need from overseas—but at a higher cost.
A trade quota is similar to a restriction on how many of something can enter the country.
It’s like the government is saying, “Only 10,000 foreign jackets may enter this year. Then sorry, none more until January.”
Objective:
Limit the number of imports so local industries don’t get overwhelmed by foreign goods.
Effect:
Even if you are prepared to pay a premium, you just can’t get more after the quota has been met.
Shortcut to remember:
A tariff is basically a tax that a government charges on goods coming into or going out of a country. Think of it like an entry fee at a theme park — if a product wants to “enter” a country, the government might ask for a payment at the border. Governments do this for a few reasons: to protect localRead more
A tariff is basically a tax that a government charges on goods coming into or going out of a country.
Think of it like an entry fee at a theme park — if a product wants to “enter” a country, the government might ask for a payment at the border. Governments do this for a few reasons: to protect local businesses from cheaper foreign products, to encourage people to buy locally made goods, or to raise money for national projects.
For example, if imported shoes have a tariff, they become more expensive in stores. That way, local shoe makers might have a better chance to compete.
It’s not always good or bad — tariffs can protect jobs, but they can also make everyday items more expensive.
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