A country can impose a tariff to improve its own terms of trade if it

Question

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If a country constitutes a large fraction of the world demand for some commodity that it imports, it has some bargaining power to negotiate better terms of trade. By imposing a tariff, it can force foreign firms to lower the prices of their goods or increase the quantity supplied, which can improve the country's terms of trade. This is particularly true if the commodity is inelastic in demand, meaning that consumers (in this case, the country) are willing to pay a high price for it even if the quantity demanded is not very responsive to changes in price.

A Country Can Impose a Tariff to Improve Its Own