Basically, a tariff is a tax levied by
governments to control the flow of products across borders and
making foreign manufacturers’ products more expensive. The purpose
is to increase demand for domestic products while reducing the
volume of imports. Tariff charges can be fixed price or a
percentage of the transaction price.
In the United States tariffs, also called duties or levies are
collected by Customs and Border Protection agents at 328 ports of
entry across the country.
Importers pay more for products by paying the tax on top of the
product cost. They pass along the increased costs to businesses,
which pass along the higher costs to shoppers.
Because a tariff is a tax, the government receives increased
revenue as imports enter the domestic market. Domestic industries
also benefit from a reduction in competition, since import prices
are artificially inflated.