Since mercantilism is as popular as ever, and if Trump sticks around, we will have to hear more about it, I thought we could do with a definition:
A tax imposed on goods imported from outside the country that is not imposed on similar goods from within the country. Import tariffs may be levied on an ad valorem basis, i.e., as a certain percentage of the estimated market value of the imported item; or on a “specific” basis, i.e., as a fixed dollar amount per unit imported. Import tariffs (or “duties”) may be imposed mainly for the purpose of raising revenues because they are relatively cheap and easy taxes for a small or poorly organized government to collect, but more usually in developed industrial societies they represent a tiny fraction of revenues and are imposed primarily for other reasons of economic policy. “Protective” tariffs allow domestic producers of the good in question an artificial competitive advantage over their foreign competitors (largely at the expense of domestic consumers of these products) by making it impossible for the foreign producer to sell his goods as cheaply as he otherwise would — thus allowing favored domestic producers to enjoy higher prices, a bigger market share, and bigger profits.