Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. Tariffs are also imposed in order to raise government revenue, or to reduce an undesirable activity (sin tax). Although a tariff can simultaneously protect domestic industry and earn government revenue, the goals of protection and revenue maximization suggest different tariff rates, entailing a tradeoff between the two aims.
A tariff is a tax added onto goods imported into a country; protective tariffs are taxes that render the cost of a foreign import higher than the cost of the initially costlier domestic good. For example, if a piece of cloth cost $4 in Britain and $4 in the United States, the American government would have to impose a tariff to make the price of British cloth higher for Americans. The underlying goal for a protective tariff is to protect domestic industry from foreign competition.

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