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Tariff is a duty or tax that is imposed on the exports and the imports of the country. If a government imposes tariff, they can earn revenue out of it. It is an income for the government. However, tariff restricts international trade and foreign exports and imports. More..

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Tariff Vs Duty

Tariff or duty means the same thing. In the United States, it is known as tariff, and in the United Kingdom, it is called a duty. Basically both are imposed on goods that are being exported and imported.

Tariffs increase the total cost of imports, and it decreases the demand for the local products. Agriculture products suffer the most as other countries will start offering products at much cheaper rate. In most of the developed countries, where the climatic conditions are not that favorable, agricultural products are more expensive because high tariffs are placed on them.

The benefit of removing tariffs is that the world trade will increase. Countries will export and import more freely, and also the global economy will increase. Right now several countries are limited to their local markets and the resource earnings are limited. Global trade will increase the economy of all the countries.

Tariffs increase the revenue for the government. The government will impose less tax on its people. If the tariff is low, then people have to pay more taxes. The revenue from tariffs will be very small compared to that from taxes. Also, when a country imposes high tariff, then others will stop trading with them. This will stop the revenue completely for the tariff imposing country.

There are several pros and cons of tariffs. The aftermath of tariffs is huge for a country. However, for poorer countries, removing tariffs is beneficial because their local markets improve, and also their economy improves on the fast track.

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Tariff Vs Duty