Here’s how tariffs would make products more expensive
Tariffs will be a big part of the Trump administration’s trade policy. So, what are they and how do they work?
President-elect Donald Trump plans to implement a 25% tariff on all products from Mexico and Canada to target drugs, particularly fentanyl, and illegal immigration, plus an additional 10% tariff on existing tariffs on Chinese products coming to America.
Trump’s announcement of his plans has spurred questions about what tariffs mean for American consumers, as well as the products that may face additional fees.
Oil and “billions worth of wood and paper” are imported from Canada to America, USA TODAY reported. Electronics, textiles, furniture and toys are among the popular goods imported from China. As for Mexico, imports from the country to our south include “cars and components for cars.” However, considering agricultural goods accounted for around $20 billion in American purchases from Mexico last year, food prices may spike in America.
What is a tariff?
A tariff is a tax on imported goods that is almost always paid by the business importing goods and never the exporting country, according to the nonpartisan Tax Policy Center. However, it’s often consumers in the country imposing tariffs that pay for the tariff in the form of higher prices.
Experts say the argument for tariffs is to increase demand for domestic manufacturers, even though they are also part of the global supply chain that tariffs could impact, USA TODAY reported. National security is also an argument for using tariffs to ensure domestic production.
However, tariffs could cause inflation or an economic downturn in the short run and, in the long run, lead to lower income and production, according to the nonpartisan Tax Foundation.
Tariffs account for very little of America’s total federal revenue, according to the Congressional Research Service, which provides research to committees and members of the House and Senate, regardless of political party.
Can the president impose tariffs without Congress?
Congress has the authority to make U.S. tariff policy, and the legislative branch usually set tariff rates before the 1930s, according to Congressional Research Service. However, Congress has “delegated extensive tariff-setting authority to the President” for decades. Through certain statutes, the president can impose or adjust tariffs, such as adjusting tariffs on imports that threaten U.S. national security or raise tariff rates when the U.S. International Trade Commission finds that an import surge has injured an American industry, according to the Congressional Research Service.
USA TODAY reporters Kinsey Crowley and Savannah Kuchar contributed to this article.
Paris Barraza is a trending reporter covering California news at The Desert Sun. Reach her at [email protected]. Follow her on Twitter @ParisBarraza.
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Publish date : 2024-11-26 08:51:00
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