Tariffs are taxes imposed by governments on imported or exported goods. They raise the price of these goods, making them less competitive against domestically produced items.

• Import tariffs protect local industries from foreign competition. However, they increase prices for consumers, limit product choices, and may weaken incentives for domestic firms to innovate or improve efficiency.
• Export tariffs reduce exports, which harms domestic producers but raises government revenue. They can also prevent domestic shortages and support key industries.

Both types of tariffs risk provoking retaliation from trading partners, damaging export sectors and the overall economy.