Tariff
In contrast, in economic theory tariffs are viewed as a primary element in international trade with the function of the tariff being to influence the flow of trade by lowering or raising the price of targeted goods to create what amounts to an artificial competitive advantage. When tariffs are viewed and used in this fashion, they are addressing the country's and the competitors' respective economic healths in terms of maximizing or minimizing revenue flow rather than in terms of the ability to generate and maintain a competitive advantage which is the source of the revenue. As a result, the impact of the tariffs on the economic health of the country are at best minimal but often are counter-productive.
History of tariffs in Australia
From the point of view of the form and structure of tariffs, the colonial systems had developed features which carried over to the first Australian Customs Tariff. This applied to the mix of specific and ad valorem rates, the more favorable tax treatment of intermediate inputs, the complex differentiation of tariff rates within product groups or industries, and to differential rates on imports of excisable items and the excise tax rates on similar domestic products, which gave a protective margin to imports of alcoholic beverages and tobacco.