Tariffs are taxes placed on goods imported into a country, typically imposed by its government. In the United States, tariffs are used to regulate international trade and protect domestic industries from foreign competition.
When tariffs are imposed, U.S. businesses directly pay the duties to the federal government, which are then passed on to consumers as increased costs. Tariff proponents like President Trump argue that levies can help manufacturers stay competitive by making imported goods more expensive.
However, many economists and trade experts disagree, citing a lack of evidence that tariffs stimulate manufacturing. In fact, some U.S. businesses may choose to absorb the costs or lower their prices to maintain sales, rather than passing them on to consumers.
The impact of tariffs on inflation is also a concern. Imposing new tariffs could lead to higher prices for U.S. consumers, with estimates suggesting an increase of up to $2,400 in annual costs. This would push the effective U.S. tariff rate to its highest level since 1890s.
President Trump supports tariffs as a way to raise revenue and protect domestic industries, citing examples from his previous administration’s tariffs on Chinese imports. However, data on their effectiveness is mixed, with some industries showing job growth but others experiencing declines in manufacturing employment.
Source: https://www.cbsnews.com/news/what-are-tariffs-trump-canada-mexico-what-to-know