Tariff

A tariff is a tax a government charges on a commodity as it crosses its border, usually on imports, that raises the price paid inside that market.

A tariff is charged when a commodity crosses a border, calculated either as a fixed amount per unit or as a percentage of value, and it is collected by the importing country’s customs authority under a specific HS code. The direct effect is to raise the price a buyer inside the tariff-imposing country pays, relative to a supplier outside it.

Tariffs are used to protect domestic producers from cheaper imports, to raise government revenue, or as leverage in a broader trade dispute. A tariff aimed at one exporting country can reroute trade rather than eliminate it: buyers often shift purchases to untariffed origins, and the targeted country sells the same volume elsewhere at a discount. Because tariffs are set at the product and country level, the same commodity can face different duties depending on where it was grown or mined and where it is headed.