What is the primary purpose of tariffs?

The primary purpose of tariffs is to protect domestic industries. Tariffs are taxes imposed on imported goods, making them more expensive relative to locally produced items. This price increase helps to reduce the competitiveness of foreign products in the domestic market, encouraging consumers to choose local alternatives. By doing so, tariffs support domestic businesses by shielding them from international competition, allowing them to grow and maintain jobs within the country.

While generating revenue for the government can be a secondary effect of tariffs, it is not their main objective. Tariffs do not encourage free trade; rather, they create barriers to trade, which can lead to a reduction in trade volumes. Moreover, tariffs do not increase the variety of goods available; they may limit the options for consumers by making imported goods less accessible or affordable. Therefore, the focus of tariffs is primarily on safeguarding local industries and promoting a favorable environment for domestic production.