What Does Trump's New Tariffs Mean?

May 13, 2019
What exactly are tariffs?
Tariffs are a tax on imports. They are typically charged as a percentage of the transaction price that a buyer pays a foreign seller. Let’s say an American retailer buys 200 dolls from China for $6 apiece — $1200 total. And suppose the U.S. tariff rate for the doll is 7 percent. The retailer would have to pay an $84.00 tariff on the shipment, which raises the total price from $1200 to $1284. Also sometimes, the U.S. will add additional tariffs on imports that they determine are being sold at unfairly low prices or are being supported by foreign government subsidies.
Who Benefits?
Trump’s Tariffs Explained:
President Trump escalated his trade war with China, raising tariffs on $200 billion worth of Chinese goods and taking steps to tax nearly all of China’s imports as punishment for what he said was Beijing’s attempt to “renegotiate” a trade deal. Trump’s decision to increase tariffs came after a major round of trade talks in Washington to produce an agreement to prevent higher levies. The White House said talks would resume again soon but it remains uncertain whether the two sides can bridge the differences that have arisen.
Will They Work?
So How Will All of This End?
To be honest, I have no idea. Some Historians have pointed out that tariffs often lead to higher costs for the consumer, while economists across the board are against the plans. Trump’s decision to take on China could lead to harmful effects for consumers in the US and in China, but also worldwide. An economic showdown between the world’s biggest economies doesn’t look good for anyone.