How many times have you seen or heard the word “tariff” in the news in the past month? Chances are it’s a pretty big number. Recently, with President Trump taking over in the Oval Office, there have been quite a few economic changes in our country, specifically regarding tariffs and foreign trade. In this article, I’ll give a brief explanation as to what tariffs are and why they’ve been in the news so much lately.
What are tariffs?
Tariffs are taxes and duties on imported goods from other countries. The company that imports the goods from another country is required to pay a tariff to the country in which they are doing business or selling the goods.. Our government charges a fee before the imported product can enter the domestic economy. Apart from creating higher consumer prices, tariffs can also alter trade dynamics between countries and international relations. The U.S. Customs and Border Protection is in charge of collecting and overseeing all tariff transactions.
What’s happening with tariffs right now?
In the past three months, there has been a lot of debate and talk within the Trump Administration regarding tariffs. President Donald Trump has frequently mentioned implementing a 25% increase tariff on imports from Canada and Mexico, as well as an additional 10% from China. On February 4th, the increased tariffs on China were put into place, however, the Mexican and Canadian tariffs were not yet made official.
This past week, on April 3rd, new tariffs were implemented on imports from the European Union as well as South Korea, Japan, and Taiwan.
Trump claims that these tariffs will boost the United States economy by protecting jobs and raising tax revenue. While this sounds like a good outcome, the opposite is actually happening right now with so many federal employees losing their jobs. Another major downside to these tariffs is the recent downturn of the stock market, making it the worst it’s been since COVID-19 took its toll. While some parts of the market have begun to recover, uncertainty remains over how long things will fluctuate.
Why is any of this important?
You might be wondering why any of this information is significant since as secondary students, tariffs don’t really apply to us. In actuality, tariffs and the economy right now are more crucial than ever, and it’s important to stay updated so we know what’s going on in the world. Some of the more common and relatable effects of tariffs rising include higher costs of items, job loss, and lower income throughout the country.
It’s unclear exactly what is predicted to happen next regarding tariffs, but over the next four years we are likely to see quite a lot of change in our economy, hopefully positive.
