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A tariff is a government-imposed tax on the value of imported products. The tariff, also known as a duty, is mostly remitted at a foreign port’s custom clearance. Local taxes, national sales, and sometimes custom fees are also charged alongside the tariff charges. Tariffs are levied to increase the cost of importing your goods. This makes you less competitive in the industry than domestic goods.
This might be a government’s way of discouraging trade with certain countries or restricting the importation of certain goods. They might also be trying to improve the country’s revenue through taxation or controlling the flow of various products into the economy. Tariffs should not be confused with taxes. Taxes refer to the charges the government imposes on taxpayers on all levels to improve the company’s revenue. On the other hand, tariffs are only imposed on imported products for specific reasons, mainly to protect domestic industries.