Tariff
Plain definition
A tax levied by a government on imported goods. A tariff raises the domestic price of imports, protecting domestic producers but raising costs for consumers and for firms that use imported inputs.
In economics
Tariffs create a classic welfare loss: consumers pay higher prices, domestic producers gain, the government collects revenue, and a deadweight loss falls on the economy overall. Retaliatory tariffs trigger trade wars, and tariffs on intermediate inputs can damage a country's own export competitiveness.
Example
A 25% tariff on imported steel raises the US price of foreign steel from 1,000 per ton, sheltering American steelmakers while making cars and construction more expensive for buyers.
Many assume tariffs are paid by foreign exporters. In practice the importer pays the duty at the border and typically passes the cost to domestic consumers through higher prices -- the importing country's own citizens bear most of the burden.