Tariff

A tariff is a tax on things coming into a country. If the US puts a 25% tariff on imported steel, an importer bringing in 1,000 dollars of steel pays an extra 250 dollars to the government. That cost usually ends up partly in the price shoppers pay.

Governments use tariffs to protect home industries, raise money or apply pressure in negotiations. Markets watch them closely, because they shift trade flows, can push up inflation and often trigger retaliation, and with it, moves in the currencies involved.