Protective Tariff
A protective tariff is a tax imposed on imported goods to make them more expensive than domestic products. This encourages consumers to buy locally made items, helping to support local industries and jobs. By raising the cost of foreign goods, the government aims to protect its economy from international competition.
Countries often use protective tariffs to promote economic growth and maintain national security. However, these tariffs can lead to trade disputes and may result in higher prices for consumers. Balancing the benefits of protecting local businesses with the potential downsides is a key challenge for policymakers.