Which statement about tariffs is true?

• A. Tariffs always lower domestic prices for consumers.
• B. Tariffs can protect domestic industries, generate revenue, or influence trade patterns.
• C. Tariffs are designed to stop all imports entirely.
• D. Tariffs have no impact on trade patterns.

Answer: (B)

Tariffs are taxes on imported goods, which makes foreign products more expensive relative to domestic ones. That price difference can help shield domestic industries from foreign competition by giving local producers a cost advantage. Tariffs also raise government revenue through the duties collected on imports, which is a common effect depending on how high the tariff is and how responsive consumers are to price changes. Because tariffs change the relative costs of imported versus domestic goods, they influence trade patterns: buyers might substitute domestic products or seek different suppliers, and producers may adjust sourcing or production to navigate the new price landscape. Together, these effects explain why tariffs can protect domestic industries, generate revenue, or influence trade patterns. The other statements don’t fit: tariffs typically raise consumer prices on imports, aren’t aimed at stopping all imports, and do affect trade patterns.