What is a tariff and why do countries use them?
The Tariff Toolbox
What is a tariff and why do countries use them?
Imagine you're selling lemonade on your block. Business is great! But then a kid from the next street over rolls up with a cart, selling lemonade for half your price. Suddenly everyone's buying from them, not you. What do you do? Countries face this exact problem — and they invented something called a tariff to deal with it.
A tariff is a tax that a country puts on products coming in from other countries. Let's say Japan makes excellent bicycles and sells them in America for $100 each. The U.S. government might add a $30 tariff. Now that Japanese bike costs $130 at the store. The extra $30 goes straight to the government.
