A tariff is a tax imposed on goods imported and exported by a country. It is a percentage of a price that is added to its value. Tariffs are used to try and promote locally made products by placing an extra tax on imported items.
Here’s a current world example: An item made in the US cost $110, and an item imported from Canada cost $100 before a tariff was imposed. The government placed a 25% tariff on goods imported from Canada. Now, people who buy that specific product from Canada will pay $25 to the government in addition to $100 for the product(so $125 in total). That makes the US-made item for $110 cheaper, encouraging people to buy locally made products.
Tariffs are meant to be used as a tool to regulate the prices of locally produced and imported goods. The current president, Donald Trump, is instead using it as a threat against other countries. He has placed heavy tariffs on 60 foreign nations, including a 25% tariff on Canada and Mexico, and a 10% tariff on China. The problem with these tariffs is that there are many, many goods imported from outside the country that are now very pricey. Berries, avocados, and bananas are all foods that are imported and will be affected by tariffs. Clothing and electronics will also become more expensive.
The US economy and Americans’ lives will be significantly impacted by Trump’s tariffs. The stock market has taken a hit, because everything has become so expensive, and companies have to pay more. The IMF, or the International Monetary Fund, now says that a US recession this year is now more likely. In addition, the tariffs have had many impacts globally. Countries on the receiving end of Trump’s tariffs will push back by imposing tariffs of their own on US goods. This creates an international trade war, which is an economic battle between countries. A major trade conflict exists between the US and China, and it continues now that Trump has imposed a 45% tariff on China to pressure them to stop unjust economic practices. China has placed a 25% tariff on US-imported goods in return.
Cites –
www.cfr.org
www.bbc.com
www.nyt.com
www.fiercehealthcare.com
https://www.theguardian.com
