HISET Social Studies Practice

What are tariffs commonly understood to be?

1. Taxes on exported goods

2. Taxes imposed on income

3. Taxes on imported goods

4. Fees for international trade agreements

The correct answer is: Taxes on imported goods

Tariffs are defined as taxes imposed on goods that are imported into a country. This means that when a product arrives from another nation, the receiving country may apply a tariff to that product, which raises its price in the domestic market. The primary purpose of tariffs is to protect domestic industries by making imported goods more expensive and thus less competitive compared to local products. This can encourage consumers to buy domestically produced goods, which can support local jobs and industries. While other options present different types of taxes, only the one related to imported goods accurately reflects the role and function of tariffs within international trade. Taxes on exported goods or income, and fees for international trade agreements do not capture the specific nature of tariffs and their application in global commerce.