Which of the following best describes the impact of import tariffs?

The impact of import tariffs is best described by the idea that they can protect domestic industries but may lead to higher prices. Import tariffs are taxes imposed on goods brought into a country, which raises the cost of those imported goods. This typically makes domestic products more competitive since they do not incur the same additional costs as imports. As a result, domestic industries may benefit since consumers are encouraged to buy local products instead of potentially cheaper imported ones.

However, while tariffs may protect domestic industries, one significant consequence of imposing them is that they can lead to higher prices for consumers. When import prices rise due to tariffs, sellers in the domestic market can also raise their prices, knowing that consumers have fewer alternatives for their purchases. Therefore, while tariffs can bolster local economies by supporting domestic production, they often come at the cost of higher prices for goods available to consumers.

Other options do not accurately capture the essence of how tariffs function. For example, tariffs do not universally lower prices as that contradicts their intended purpose; they also do not eliminate the need for domestic production since they aim to support it; finally, tariffs typically complicate international trade agreements rather than simplify them, as they may lead to retaliatory measures from other countries.