In international trade, a tax charged on imported goods is called a tariff.
Governments impose tariffs when goods cross a customs border. They may calculate the charge as a percentage of the product’s value, a fixed amount per unit, or a combination of both. Tariffs can raise government revenue, protect domestic producers from foreign competition, or support broader trade policy.
Tariffs differ from several other taxes. An excise tax is usually charged on particular goods, such as fuel or alcohol, whether they are imported or domestically produced. A value-added tax is collected at stages of production and sale, while a tariff specifically applies to imports. Importers generally pay tariffs to customs authorities, although the cost may later be reflected in prices.
Historically, tariffs were an important source of government income before modern income taxes became widespread. Today, they are also central to trade agreements and disputes, because higher import charges can affect consumer prices, supply chains, and exports.