(a)Tariffs: Tariffs are taxes or duties imposed on imports and exports by the government of a country.
(b) Reasons for imposing tariffs are:
(i) Imposition of tariffs is a source of revenue to the government.
(ii) Newly established companies are protected from competition from foreign companies.
(iii) If a country imports all sorts of goods without checks, it will suffer from Unfavourable balance of trade and payments.
(iv) Dumping of goods, especially in non industrialized country will occur if the country allows free trade to happen.
(v) To check con-sumption pattern: If all sorts of goods are allowed to come into the country, the citizens will develop uncontrollable appetite for foreign goods.
(vi) The rich are made to pay higher rate as tax than the low income earner.
(vii) As a retaliatory measure: Tariffs can be used as retaliatory measures. It is imposed by one country against another.
(viii) To prevent the importation of dangerous goods: If international trade is not controlled, goods that are detrimental to health especially drugs will come into the country.