How do tariffs impact international trade?

Tariffs impact international trade primarily by increasing the cost of imported goods, which can lead to shifts in consumer behavior and purchasing patterns. When a government imposes tariffs on imports, it raises the price of those goods, making them less competitive compared to domestic products. This protective measure is intended to support local industries by giving them an advantage over foreign competitors.

As a consequence, while protecting domestic jobs and businesses, tariffs often lead to retaliatory measures from other countries, resulting in trade wars. This can escalate into a cycle of increasing tariffs and reduced trade, adversely affecting global supply chains and international relationships.

The other options misrepresent the effects of tariffs. They do not decrease the cost of imported goods, nor do they leave consumer prices unaffected; in fact, they typically raise prices for consumers. Additionally, tariffs impact both imports and exports, not just one or the other, as the response to tariffs can reshape trade dynamics for all goods involved.