Final answer:
A tariff is a tax imposed on imported goods, with functions that range from generating revenue to protecting domestic industries and influencing political interests. The WTO is significant in managing and negotiating international trade agreements to reduce such tariffs and promote global economic growth.
Step-by-step explanation:
A tariff is a tax levied on goods when they enter a country. Tariffs are used by nations primarily to generate revenue and to protect domestic industries by inflating the prices of foreign goods, thus making them less attractive to consumers compared to locally produced items. For instance, the recent 5% tariff rate on large, flat-screen televisions imported to the U.S. from China is an example of such a measure, designed to discourage imports and support the domestic industry.
Traditionally, tariffs have been deployed as a political tool to safeguard vested economic, social, and cultural interests. Furthermore, the World Trade Organization (WTO) plays a critical role in the effort to reduce barriers to international trade, including tariffs. The negotiations conducted through the WTO, such as the Doha Round, aim to establish mutually beneficial trade agreements that can potentially add significant value to the global economy by enhancing market access and reforming agricultural subsidies.