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Tariff

A tariff is a tax or duty imposed on goods crossing a national border, most often on imports.

By Ethan Anderson| Reviewed by Olivia Bennett, Standards & Fact-Checking Lead| Updated July 26, 2026|2 min read| Fact-checked

A tariff is a tax or duty imposed on goods crossing a national border, most often on imports. Tariffs are used to raise government revenue and to make imported goods more expensive, which can give domestic producers a price advantage. In some contexts, the word also refers to a schedule of prices or charges for services.

Definition

In economics and trade, a tariff is a customs duty or tax levied on goods moving across a national border, especially imports. Dictionaries also record a broader non-trade meaning: a schedule of charges for services.

Types of tariffs

Common tariff types include ad valorem tariffs, which are based on a percentage of value, and specific tariffs, which charge a fixed amount per unit. Compound tariffs combine both methods.

Purpose and effects

Tariffs are used to generate government revenue and to protect domestic producers by increasing the price of imported goods. Economic sources note that consumers often face higher prices when tariffs are imposed.

Historical and policy use

Tariffs have long been used as trade-policy tools, including to shield domestic industries and respond to foreign trade practices. Their role has changed over time as many countries have reduced trade barriers under agreements such as GATT and the WTO.

Key facts

  • Tariffs are taxes imposed on goods as they cross borders, usually on imports.
  • They can be charged as a percentage of value, a fixed amount per unit, or a combination of both.
  • Tariffs often make imported goods more expensive for buyers.
  • Governments use tariffs to raise revenue and to protect domestic industries from foreign competition.
  • The term can also mean a list of charges for services such as utilities or hotels.
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Canadian context

Tariffs matter to Canadian readers because Canada uses customs duties and trade policy in its trade relationships, including with the United States and other partners. The term is also relevant in Canadian law and business when imported goods are classified for duty purposes.

Frequently asked questions

What is a tariff?
A tariff is a tax or duty on goods entering or, less commonly, leaving a country.
Who pays a tariff?
Tariffs are generally paid by the importing business or importer to the government, though the cost may be passed on to consumers through higher prices.
Why do governments use tariffs?
Governments use tariffs to raise revenue, protect domestic industries, and sometimes respond to trade disputes or unfair practices.
What are the main types of tariffs?
The main types are ad valorem tariffs, specific tariffs, and compound tariffs.
Do tariffs always apply to imports?
No. Tariffs are mostly levied on imports, but some countries also impose tariffs on exports.
Does tariff have another meaning?
Yes. It can also mean a schedule of prices or charges for services such as utilities, hotels, or restaurants.

References

  1. European Commission — https://trade.ec.europa.eu/access-to-markets/en/glossary/tariff
    Supports: Defines tariff as a customs duty or tax on imported merchandise goods; explains ad valorem, specific, and compound tariffs; notes revenue and price effects.
  2. Encyclopaedia Britannica — https://www.britannica.com/money/tariff
    Supports: Defines tariffs as taxes on goods crossing national boundaries and notes their use for revenue and price effects.
  3. Merriam-Webster — https://www.merriam-webster.com/dictionary/tariff
    Supports: Defines tariff as a schedule of duties or rates and also as a schedule of prices or charges for services.
  4. Council on Foreign Relations — https://www.cfr.org/backgrounders/what-are-tariffs
    Supports: Explains common tariff types, policy purposes, and the tendency for costs to be passed to consumers.
  5. Cornell Law School Legal Information Institute — https://www.law.cornell.edu/wex/tariff
    Supports: Defines tariff as a tax on imported goods and notes historical context and customs classification in U.S. law.