<h5>What Are Tariffs?</h5><p>Tariffs are special taxes. Governments put them on goods that come from other countries. They are used to protect local businesses, control trade, and get money for the government.</p><p>When a tariff is added, the price of imported goods goes up. This makes foreign products more expensive than local ones. For example, if there is a tariff on foreign cars, people may buy local cars because they are cheaper.</p><h5>How Tariffs Work</h5><p>Imagine India buys toy cars from another country, Country A. The toy car costs ₹100. If India adds a tariff of ₹20, the toy car will cost ₹120 in shops. Many people will then buy Indian toy cars for ₹100 instead. In this way, tariffs make foreign products more expensive and help local businesses.</p><h5>Why Do Countries Use Tariffs?</h5><p>Countries use tariffs for many reasons. One reason is to help local industries. If local farmers or factories cannot compete with cheap foreign goods, tariffs make imports more costly. This helps local producers.</p><p>Another reason is money. In the past, tariffs were an important way for governments to collect money, before modern taxes existed.</p><p>Sometimes countries also use tariffs in trade wars. If one country puts tariffs on another, the other country may answer with tariffs too. This makes products expensive in both places.</p><h5>How Tariffs Affect People</h5><p>Tariffs can be good and bad. They can protect jobs, support local businesses, and give money to the government. But they can also make products more expensive. For example, if there is a high tariff on foreign mobile phones or clothes, people must pay more. Businesses that need imported goods may also lose money.</p><h5>A Balance to Find</h5><p>Tariffs are important in trade, but they must be used carefully. Too many tariffs can hurt buyers and trade between countries. Too few tariffs can harm local industries. In the end, tariffs show how governments try to balance the needs of local businesses, the economy, and other countries.</p>

A simple guide to how tariffs work and why countries use them.

The Effects of Tariffs on People and Countries

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