ABSTRACT
Tariffs are designed partly for revenue, and provide an important part of the tax receipts of most countries. All tariffs, whether their object is revenue or protection or discrimination, or a mixture of these, are likely to have some effect in discouraging imports; for their usual effect is to raise the prices of imported goods. Only under very exceptional circumstances does the foreigner pay the full amount of the duty. The tariff is essentially a restrictive instrument, tending to reduce the volume of foreign trade. Tariffs are, however, highly uncertain in their working. The most familiar method of restricting total imports, and at the same time stimulating exports, is the manipulation of the external value of the national currency. Currency depreciation, like protective duties, usually produces its maximum effect at the outset; and subsequently this effect tends to wear off, unless the depreciation is pushed further and further.
