Tariffs are often created to protect infant industries and developing economies, but are also used by more advanced economies with developed industries

Tariffs

In simplest terms, a tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact.

Tariffs are like taxes for goods being imported into one country from another one. They are meant to limit or slow imports of certain goods to either protect national industries or decrease competition from the goods being imported. It decreases trade and slows economic business. For example if Japan imports one million cars into the USA then sales of USA Auto makers will decrease. If tariffs limit the importation then USA auto makers have more ability to sell cars through less competition.

Countries in order to protect their economies apply methods of restrictions such as tariffs, quotas, subsidies and exchange controls. By applying protectionism a country can gain from it in such as protecting infant industries, dumping and protecting manufacturing industries, but on the other hand can also have problems such as firms remaining inefficient, retaliation, and misallocation of resources, and related directly to international trade countries benefit on comparative and absolute advantage, and economies of scale.So it affects the international trade.