Cambridge O Level Business Studies · Syllabus 7115 · External Influences on Business Activity
Import Tariff
What is Import Tariff?
A tax placed by a government on goods imported into a country. It raises the price at which imported goods can profitably be sold, making them less competitive against domestic products, and it generates revenue for the government. Imports can still enter in any quantity, provided the tax is paid. A tariff raises input costs for domestic businesses that rely on imported materials or components, and can provoke retaliatory tariffs from other governments against that country's exporters.
This definition is part of the External Influences on Business Activity chapter in Cambridge O Level Business Studies.
Questions students ask about Import Tariff
What is the difference between an import tariff and an import quota?
A tariff is a tax on imports: goods can still enter in any quantity, but each one now costs more once the tax is paid. A quota is a physical limit on quantity: beyond that limit, no further imports may enter at any price. The two work through different mechanisms, so their effects on a business that depends on imported inputs differ too.