What is a duty in the context of international trade?

In the context of international trade, a duty is indeed characterized as a tax on goods transported across borders. This taxation occurs when goods are imported or exported, and duties are typically applied to raise revenue for governments while also serving to regulate international trade by making imported goods more expensive compared to domestic products. The purpose of implementing duties may include protecting local industries from foreign competition, encouraging local production, and generating income for governmental budgets.

The concept of duties is integral to international trade, and understanding how they function can influence business decisions and strategies for both importers and exporters. They play a critical role in shaping the dynamics of trade relationships and economic policies on a global scale.