Figure8-10The Effect of a Tariff A tariff raises the domestic price of the good from PW to PT. The domestic quantity demanded shrinks from QD to QDT, and the domestic quantity supplied increases from QS to QST. As a result, importsāwhich had been QD ā QS before the tariff was imposedāshrink to QDT ā QST after the tariff is imposed.