Legal Definitions - protective tariff

A protective tariff is a tax on imported goods that is designed to protect domestic industries from foreign competition. The purpose of a protective tariff is to make imported goods more expensive, which makes domestic goods more competitive in the marketplace.

For example, if a country imposes a protective tariff on imported steel, it will make steel from other countries more expensive. This will make it more difficult for foreign steel producers to compete with domestic steel producers, which will help protect jobs in the domestic steel industry.

Another example is the protective tariff that the United States imposed on Chinese solar panels in 2012. This tariff was designed to protect American solar panel manufacturers from competition from China, which was flooding the market with cheap solar panels.

Overall, protective tariffs are controversial because they can lead to higher prices for consumers and can also lead to retaliation from other countries, which can hurt exports and jobs in other industries.