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Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers.
Governments typically use one of the following justifications for implementing tariffs:
a) To protect domestic jobs. If consumers buy less-expensive foreign goods, workers who produce that good domestically might lose their jobs.
b) To protect infant industries. If a country wants to develop its own industry producing a particular good, it will use tariffs to make it more expensive for consumers to purchase the foreign version of that good. The hope is that they will buy the domestic version instead and help that industry grow.
c) To retaliate against a trading partner. If one country doesn’t play by the trade rules both countries previously agreed on, the country that feels jilted might impose tariffs on its partner’s goods as a punishment. The higher price caused by the tariff should cause purchases to fall.
d) To protect consumers. If a government thinks a foreign good might be harmful, it might implement a tariff to discourage consumers from buying it.