Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry.[1] They aim to make imported goods cost more than equivalent goods produced domestically, thereby causing sales of domestically produced goods to rise; supporting local industry. Tariffs are also imposed in order to raise government revenue, or to reduce an undesirable activity (sin tax). Although a tariff can simultaneously protect domestic industry and earn government revenue, the goals of protection and revenue maximization suggest different tariff rates, entailing a tradeoff between the two aims.
