Understanding Tariffs

Tariffs are taxes imposed on imported goods, intended to influence trade dynamics. When President-elect Trump announced plans for tariffs on goods from Canada, Mexico, and China, he framed it as a method to compel those countries to address illegal immigration and drug trafficking into the United States. Despite his assertion that foreign exporters bear the cost, economists agree that the burden primarily falls on U.S. businesses and consumers. For instance, a proposed 25 percent tariff on guacamole from Mexico could significantly inflate prices ahead of key events like the Super Bowl.