What is the primary purpose of tariffs?

The primary purpose of tariffs is to protect domestic industries and generate government revenue. When a government imposes tariffs, which are taxes on imported goods, it increases the cost of those goods relative to domestic products. This can make domestic goods more competitive in price, encouraging consumers to purchase locally made products, thereby fostering growth in domestic industries.

In addition to protection, tariffs can also serve as a source of revenue for the government. The taxes collected from tariffs can be used to fund various government programs and initiatives. This dual purpose of providing protection and generating revenue is crucial in shaping trade policies and economic strategies, leading many countries to implement tariffs as a form of regulation on international trade.

The other options presented do not capture the primary function of tariffs. Lowering costs of domestic goods would typically be achieved through subsidies or other forms of support, promoting international tourism is unrelated to tariffs, and encouraging foreign investment usually requires an open market rather than barriers such as tariffs.