A tariff acts like a sales tax and it can generate revenue for the government of a country with a high level of importation. Unlike a general sales tax, however, it applies only to those choosing to buy imported products. In the end, it strengthens the domestic economy by discouraging the purchase of foreign-made goods. Eventually, by keeping more money and industry in the economy the national economic framework becomes more resilient, possibly preventing the kind of supply blockages and accompanying inflation we all experienced following the pandemic.
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