Tariff

Tariff, customs duty on an export or, more commonly, an import. The aim is generally to protect home industries from foreign competition, though it may be merely to provide revenue. During the 17th and 18th centuries the European powers created tariff systems that gave their colonies preferential treatment, but Britain's tariffs, by limiting North America's trade, helped provoke the Revolutionary War. In the early 1800s the free trade movement, bolstered by the economic philosophy of laissez-faire, helped limit the spread of tariffs. However, U.S. federal tariffs imposed to aid Northern industry damaged the South and contributed to the Civil War. U.S. and European tariffs were moderate in the early 1900s but, after the Great Depression, both the United States and the United Kingdom adopted high tariffs, with a consequent decline in international trade. In 1947 the United States and 22 other nations signed the General Agreement on Tariffs and Trade (GATT), aimed at reducing trade discrimination. GATT and the Common Market have been responsible for generally lower tariffs throughout the world.

See also: Taxation.