protective tariff
Noun: A protective tariff is a tax imposed on imported goods. Its primary purpose is to make foreign products more expensive than similar domestic goods. This is done to protect domestic firms from import competition by encouraging consumers to buy locally produced items, thereby supporting domestic industries and employment.
The term is used in economics, trade policy, and political discourse. It describes a specific type of trade barrier enacted by a government. * The government raised the protective tariff on steel to help its struggling domestic mills. * Economists debated whether the new protective tariff on electronics would save jobs or simply increase prices for consumers. * A key argument for the protective tariff was to shield nascent domestic industries from established foreign competitors.
- Historical Context: Protective tariffs have been a central tool in trade policy for centuries, often sparking international disputes. For example, the Smoot-Hawley Tariff Act of 1930 in the United States is a famous (or infamous) example of high protective tariffs.
- Contrast with Revenue Tariff: Unlike a , which is primarily designed to generate income for the government, a protective tariff is specifically intended to influence trade flows and protect domestic producers.
- Tariff (n): A general term for a tax or duty to be paid on a particular class of imports or exports.
- Import Duty (n): A synonym often used interchangeably with tariff.
- Trade Barrier (n): A broader term encompassing any regulation or policy that restricts international trade, including protective tariffs, quotas, and subsidies.
- Protectionism (n): The economic policy of restraining trade between nations through methods like protective tariffs to protect domestic industries.
- Import duty
- Import tax
- Trade barrier (in this specific form)
- Free trade
- Open market
- To impose/levy a protective tariff: The action of enacting such a tax.
- The country decided to impose a protective tariff on agricultural products.
- To raise/lower a protective tariff: To increase or decrease the rate of the tax.
- The trade agreement led to a lowering of protective tariffs between the two nations.
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a tariff imposed to protect domestic firms from import competition
