Final answer:
Tariff barriers are used to protect domestic industries from low-cost foreign competitors by making imported goods more expensive, to increase government revenue, and to guard against gray market goods. The World Trade Organization (WTO) works to reduce these barriers, fostering larger gains from international trade.
Step-by-step explanation:
Tariff barriers are primarily used to protect domestic industry from foreign competitors who may offer lower-cost goods. By imposing taxes on imported products, governments aim to raise the cost of these goods, making domestic products more competitive in the local market. This type of protectionism can lead to higher prices for consumers but can also support local industries and jobs. Additionally, tariffs serve as a source of revenue for the government and can protect against the import of gray market goods that have not been authorized by the manufacturer for sale in the domestic market.
It is important to note that while protecting domestic industries can be a goal, the use of tariffs can also lead to a decrease in international trade and potential retaliation from other countries. The World Trade Organization (WTO) encourages its members to negotiate and reduce trade barriers, which can lead to increased economic gains and benefits for all countries involved, especially for smaller countries participating in the global market.