Legal Definitions - retaliatory tariff

Retaliatory Tariff

A retaliatory tariff is a tax imposed by a country on imported goods from another country in response to that country's imposition of a similar tax on its own exports.

For example, if Country A imposes a tariff on steel imported from Country B, Country B may respond by imposing a retaliatory tariff on goods imported from Country A, such as cars or electronics.

Another example is the ongoing trade war between the United States and China. In 2018, the US imposed tariffs on Chinese goods, and China responded with retaliatory tariffs on US goods, such as soybeans and automobiles.

The examples illustrate how a retaliatory tariff is a response to a similar tax imposed by another country. It is a way for a country to protect its own industries and retaliate against what it perceives as unfair trade practices by another country. However, retaliatory tariffs can also lead to a trade war, which can harm both countries' economies.