Tariff has become a "hot topic" this week as US President Donald Trump announced sweeping "reciprocal tariffs" on several nations on the Liberation Day (Tuesday). 

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The US president said that 10% baseline tariff on all nations, and higher rates for individual countries will boost the US economy and protect jobs. 

Initially, the word "tariff" was first brought up by Trump last month, when he released a memorandum announcing his intention to impose “reciprocal tariffs” under the Fair and Reciprocal Plan 1 (FRP). 

Since then, it has indeed become Trump's favourite word, along with "deportation" of course. 

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Also read: Trump’s new tariffs hit Ukraine, penguins, and almost every country, but not Russia. Here’s why

What does tariff mean 'literally'? 

The roots of the word 'tariff' lie in the Arabic meaning "information, notification, explanation, a making known” and was derived from Arabic “to notify, make known”.

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The early appearance of the word appeared in a Sicilian document from 1338. The word is also borne in the title of a Venetian merchant guide written around 1345, according to a report by South China Morning Post. 

It was later borrowed into English, in the world's earliest documentation was in William Garrard’s 1591 manual The Art of War. Advising on the logistical organisation of battalions, the author recommended: “So that helping your memorie with certain Tablei or Tariffas made of purpose to know the numbers of the souldiers that are to enter into ranke.”

Also read: Indian government’s big plan to counter Trump’s 26 per cent tariffs? Step one: ‘Carefully examining’ the impact

Here, with the "tariffas", Garrard meant arithmetical tables or statements, a kind of cheat sheet, in this case for calculating troops arrays. 

However, today, with the globalisation, it has a more specific meaning - an official list or schedule that sets forth the customs duties to be imposed on imports and exports, a table or book of rates, or the whole body or system of such duties as established in any country. 

The most common kind of tariffs are ad valorem, which are levied as a fixed percentage of the value of the imports. 

Tariffs are a form of tax applied on imports from other countries. All the countries have been using tariffs for long. But after World War II, tariffs largely fell out of favour in advanced economies because they often lead to reduced trade, higher prices for consumers, and retaliation from abroad. 

Also read: Indian government’s big plan to counter Trump’s 26 per cent tariffs? Step one: ‘Carefully examining’ the impact

Why do countries use tariffs?

Almost every nation imposes tariffs on exports from other nations. Generally, wealthy countries maintain low tariffs compared to developing countries. 

However, there are several reasons behind it: 

Developing countries might have more fragile industries that they want to protect or they might have fewer sources of government revenue. 

For example, the US maintained high tariffs for decades, until income taxes supplanted tariffs as the most important source of revenue in the 1930s. 

Also read: Did Donald Trump really spare Canada and Mexico from latest round of tariffs? White House reveals truth

(With inputs from agencies)