Which example best illustrates the use of a tariff in procurement?

Which example best illustrates the use of a tariff in procurement?

• A. Banning trade with a sanctioned country
• B. Setting quantity limits on exports
• C. Imposing taxes on imported goods to protect domestic suppliers.
• D. Subsidizing domestic manufacturing

Answer: (C)

A tariff is a tax on imported goods that raises their price, making domestic products comparatively more competitive and often generating government revenue. This makes the example that imposes taxes on imported goods to protect domestic suppliers the best illustration in procurement, because it directly changes the cost landscape for foreign-origin products and can steer buyers toward domestic alternatives or prompt price negotiations to offset the added cost. The other options describe different tools: sanctions ban trade with a country, export quantity limits are export controls, and subsidies support domestic production rather than imposing a tax on imports. In procurement practice, tariffs affect total cost of ownership, supplier choices, and risk, since changes in tariff rates can shift prices, availability, and compliance considerations.

A tariff is a tax on imported goods that raises their price, making domestic products comparatively more competitive and often generating government revenue. This makes the example that imposes taxes on imported goods to protect domestic suppliers the best illustration in procurement, because it directly changes the cost landscape for foreign-origin products and can steer buyers toward domestic alternatives or prompt price negotiations to offset the added cost. The other options describe different tools: sanctions ban trade with a country, export quantity limits are export controls, and subsidies support domestic production rather than imposing a tax on imports. In procurement practice, tariffs affect total cost of ownership, supplier choices, and risk, since changes in tariff rates can shift prices, availability, and compliance considerations.