Throughout the 2024 election cycle, and following his win in the electoral college, President Donald Trump used the word “tariff” quite a bit. He even said it was the fourth most beautiful word in the dictionary, following God, religion and love, respectively. However, many Americans don’t understand what tariffs are.
On Google Trends, there are interest spikes in the search term “what is a tariff” around two specific dates. One is the week of the 2024 election, and the other is the first week of February, which is around the time he announced he would be implementing increased tariffs on Canada and Mexico.
Recommended Videos
So, what exactly is a tariff?
Tariffs are defined by the International Trade Administration as “a tax levied by governments on the value including freight and insurance of imported products.” So at its core, tariffs are taxes imposed on products that are coming in from other countries.
What is a trade war?
Trade wars are very complicated, and can happen for various reasons. However, they normally include tariffs. Various world leaders have said there are no winners in a trade war, such as former Canadian Prime Minister Justin Trudeau and Chinese President Xi Jinping. These wars oftentimes do damage to all countries involved, as consumer spending may be unable to keep up with increased prices. Reuters has said that the tariffs that have been imposed on Mexico, Canada and China may also increase inflation.
How do tariffs impact me?
Because of many variable factors in the economy, it’s hard to say how much a tariff will impact the general public directly. However, many economists agree that consumers end up footing the bill for tariffs, as oftentimes they result in increased prices on the imports they are imposed on, according to PBS.
One of the most popular tariffs, the Smoot-Hawley Tariff, was enacted in 1930 by then-president Herbert Hoover. Economists and historians agree that the implementation of the tariff, although intended to raise money in the wake of the Great Depression, exacerbated the effects and made the depression even worse.
Many of President Trump’s imposed tariffs have been rescinded or changed, so there is still discussion and variability on how this can impact our economy.
