Tariff

A tariff is a tax that a government places on goods imported from other countries. When you buy a foreign product, tariffs increase its price—the seller or importer pays the tax, which often gets passed to you at checkout. You'll hear about tariffs in the news because they affect everything from car prices to groceries, and they can spark trade wars between nations. Tariffs are meant to protect domestic industries by making foreign goods more expensive, encouraging people to buy local instead. For example, if the U.S. puts a 25% tariff on steel from Country X, American steel companies might benefit, but construction companies that use that steel will face higher costs. As an investor, tariff announcements can swing stock prices, especially for companies that import or export heavily.