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Here's what they are and what you need to know about them:. A worker organizes boxes of flowers intended for export to the U. Tariffs are typically charged as a percentage of the price a buyer pays a foreign seller. In the United States, tariffs are collected by Customs and Border Protection agents at ports of entry across the country. Tariffs can be lower for countries with which the United States has trade agreements.
Mainstream economists are generally skeptical of tariffs, considering them a mostly inefficient way for governments to raise money and promote prosperity. Trump, a proponent of tariffs, insists that they are paid for by foreign countries.
In fact, it is importers β American companies β that pay tariffs, and the money goes to the U. Those companies, in turn, typically pass their higher costs on to customers in the form of higher prices. Still, tariffs can hurt foreign countries by making their products pricier and harder to sell abroad. Foreign companies might have to cut prices β and sacrifice profits β to offset the tariffs and try to maintain their market share in the United States.
Trump has said tariffs will create factory jobs, shrink the federal deficit, lower food prices and allow the government to subsidize child care. As president, Trump imposed tariffs with a flourish β targeting imported solar panels, steel, aluminum and pretty much everything from China. The United States in recent years has gradually retreated from its post-World War II role of promoting global free trade and lower tariffs. That shift has been a response to the loss of U.
