What is the primary purpose of tariffs in economic policy?

The primary purpose of tariffs in economic policy is to protect domestic industries by taxing imported goods. Tariffs are imposed on imports, making foreign products more expensive relative to locally-produced goods. This price increase can encourage consumers to buy domestically-produced items, thereby supporting local businesses and industries.

By protecting domestic producers from foreign competition—particularly in industries that may struggle against cheaper, imported alternatives—tariffs can help maintain jobs and promote economic stability within those sectors. This strategy is often used by governments to foster growth in strategically important industries or those that are deemed crucial for national security.

While tariffs may also raise revenue for the government, that is typically a secondary effect rather than the main objective. They are unlikely to stimulate international trade since higher costs on imports can lead to reduced trade volumes. Additionally, tariffs usually do not contribute to lowering consumer prices for imported goods; rather, they typically result in higher prices for these goods due to the added tax burden.