What are tariffs?

Tariffs are taxes on imported products. Governments impose them in order to discourage consumers from purchasing imported products and/or to raise revenue. 

Tariffs can be ad-valorem (% taxes) or specific (fixed sum taxes)

Example: The EU's common external tariff, which is a single external tariff on imports coming in the EU from countries outside the trade union, does raise revenue but its main aim is to encourage member states to trade with each other. 

However, the success of tariffs depends on:
1. The magnitude of the tariff. The higher the tariff imposed is, the greater the decrease in demand for imports and the higher the revenues received. 
2. The price elasticity of demand/ price elasticity of supply. eg. If demand for imports is inelastic, the imposition of tariff will not significantly decrease consumption of imports. 

Angeliki H. A Level Economics tutor, GCSE Economics tutor

2 months ago

Answered by Angeliki, an A Level Economics tutor with MyTutor

Still stuck? Get one-to-one help from a personally interviewed subject specialist


Shona S. A Level Economics tutor, A Level Biology tutor, GCSE Biology...
View profile
£20 /hr

Shona S.

Degree: Economics (Bachelors) - Birmingham University

Subjects offered: Economics, Maths+ 1 more


“I am a second year Economics student, studying at University of Birmingham. At school I studied Economics, Maths and Biology for A levels and having enjoyed learning them, so I feel I will be able to enthusiastically teach these subje...”

Tom H. A Level Economics tutor, A Level Maths tutor, A Level Spanish ...
View profile
£24 /hr

Tom H.

Degree: Economics (Bachelors) - Durham University

Subjects offered: Economics, Spanish+ 3 more

Business Studies

“Top tutor from Durham University, ready to help you improve your grades, all the way to A*.”

Jack G. A Level Maths tutor, GCSE Maths tutor, A Level Economics tuto...
View profile
£20 /hr

Jack G.

Degree: Politics, Philosophy, and Economics (Bachelors) - Warwick University

Subjects offered: Economics, Religious Studies+ 2 more

Religious Studies
.TSA. Oxford.

“Hello, I'm Jack and am studying politics, philosophy, and economics at Warwick.  Having recently been through the subjects I'm looking to tutor I feel like I know first hand what difficulties you'll be facing. I always found I wanted ...”

MyTutor guarantee

About the author

Angeliki H. A Level Economics tutor, GCSE Economics tutor
View profile
£20 /hr

Angeliki H.

Degree: Economics (Bachelors) - Bristol University

Subjects offered: Economics


“Hi, I am Angeliki! I am an economics student at the University of Bristol. Economics have always been my passion. Through my tutorials I will be able to pass my love and excitement about the subject to my students making it more inter...”

MyTutor guarantee

You may also like...

Posts by Angeliki

What are tariffs?

What is market failure?

Other A Level Economics questions

Explain how a company would set a price if their aim was to profit maximise.

How do you calculate Price Elasticity of Demand

Examine the desirability of a fixed exchange rate regime amongst the world's major economies.

What is aggregate demand?

View A Level Economics tutors


We use cookies to improve our service. By continuing to use this website, we'll assume that you're OK with this. Dismiss