A tariff is a tax levied by a government on imported goods. In some countries it also may be a tax on exported goods. A tariff also is called a customs duty or an impost.
In general terms the purposes of a tariff are twofold:
To supply revenue to the government. This was especially true in the early days of the United States when other forms of federal taxation had not been developed
To protect domestic producers from foreign competition. Placing a tax on an imported foreign item would make a similar domestic item more competitive in price. Use of this form of tariff is called protectionism. The stock argument presented by protectionists is that such duties are needed only until there is an equalization of production costs between the U.S. and the foreign nation.
A protective tariff is the opposite of free trade.