Which of the following best describes tariffs?

• A. Taxes on domestic sales
• B. Fees for trade compliance
• C. Charges for importing and exporting goods
• D. Taxes on local commerce

Answer: (C)

Tariffs are best described as charges imposed by a government on the import and export of goods. They serve multiple purposes, including protecting domestic industries from foreign competition, generating revenue for the government, and regulating the volume of trade between countries. By imposing tariffs on imported goods, a country can make those goods more expensive than domestically produced items, which encourages consumers to purchase locally made products. This mechanism not only affects consumer choices but also plays a significant role in international trade policies and negotiations.

The other options do not accurately capture the essence of tariffs. Taxes on domestic sales, fees for trade compliance, or taxes on local commerce pertain to different aspects of economic regulation and revenue generation that do not specifically involve the trade of goods across borders.