What does a tariff do in terms of trade barriers?

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A tariff is a tax imposed by a government on imported goods, and this is the defining characteristic of a tariff as a trade barrier. By applying this tax, the government increases the cost of imported products, making them less competitive compared to domestic goods. This can lead to a decrease in the volume of imports, protecting domestic industries and encouraging consumers to purchase locally produced items.

In contrast to tariffs, other options either misrepresent the function of a tariff or discuss different economic measures. For instance, encouraging increased importation would be contrary to the effect of a tariff, as it is designed to discourage imports. Eliminating trade restrictions altogether doesn't align with the purpose of a tariff, which is to create a barrier rather than remove it. Providing subsidies to domestic producers represents a different economic strategy rather than the tax mechanism that a tariff employs. Hence, the accurate answer neatly encapsulates the role of tariffs in international trade policy.

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