Tariff Considerations for Investors

Tariffs are taxes, sometimes called duties, to be paid on a specific class of imports, and function like a tax on imported goods. Historically their purpose was to protect domestic producers, and often are compared to value-added-taxes (VAT). However, whereas a tariff is applied only to specific imports, a VAT is a broad consumption tax on both domestic and imported goods, and for imported goods you could have both. For example, tariffs are applied to the customs value of goods, and then a VAT is applied to the total value. What tariffs and taxes have in common is the government receives the proceeds, but where they differ is who pays.