VOX leader asks: Can you explain how tariffs works? How do you impose tariffs on the daily life of Americans?
According to President Donald Trump, “tariffs are the most beautiful words in the dictionary,” only God, religion and love are exceeded.
Trump also claims that “tariffs will make us rich like hell,” “revival of the business that left us.”
Basically, tariffs are magical to improve everyone's life to hear that Trump conveys it.
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The short answer is no. Credit is not a magical cane, but it is a complex and potentially dangerous economic tool that can make life more expensive and difficult.
In the early February, an aggressive tariff set was announced. There were 25 % of all Mexico and Canada products on Saturdays and 10 % of all Chinese products.
For a while, the North American continent seemed to be on the brink of the trade war. But now, the tariffs between Mexico and Canada have been postponed for 30 days.
However, new tariffs on Chinese products are still ongoing, and more tariffs may be in progress. Trump also talks about the potential tariffs of the EU. And it is important for people to understand tariffs and how they affect the life in the United States.
Let's start from the basics. Customs duties are a kind of sales tax collected by the federal government in immigration ports, and is an import port that is applied to imported goods, and is paid by a good business (usually a company). A survey has shown that companies give these costs to their customers.
Credzzles are generally calculated as the ratio of the cost of goods. If there is 25 % tariff, it means that customs duties are 25 % of goods.
Usually, the government sets up tariffs on specific goods or class products made overseas, according to the US government. When the good is reached the US port in the United States, the company that imports it must pay the government before they can receive it.
Historically, tariffs tended to be applied only to specific countries and were applied only to specific products from those countries. For example, the Biden administration has a target tariff on batteries, electric vehicles, and solar panels made in China, quoting economic and national security concerns.
The unusual thing about Trump proposed is that they belong to all products from the whole country. The 25 % tariff in Canada was not only maple syrup to protect Vermont producers.
Another strange thing about Trump's tariff is that they do not explain what they are known as De Minimis exemption. These are tariff sculptures for items less than a specific price range. Usually, the government is too small to worry.
These exemptions can be operated by companies such as Shein and Temu. However, Trump's new tariff eliminates the exemption.
How does Trump's tariff affect Americans?
The effects of tariffs depend on which country targets, which countries are produced, and how they are retaliated, and how they do. However, one analysis of Tax Foundation suggested that Trump's proposed Mexico, Canada, and China's tariffs in China would cost $ 800 this year to the average American household. I understand.
Customs for Mexico and Canada will also have a particularly sharp economic impact. With a North American trade agreement, companies have been able to handle the United States, Canada and Mexico for decades for decades. Many companies have built a supply chain and business line because they are relatively free -free products. The approaching Trump tariffs and retaliation make it impossible to maintain that level integration, which means higher prices and even go out of business.
As an example, take the automotive industry.
Ford creates one windshield in Canadian trucks, then installs the windshield in the United States, sends truck frames to Mexico to install the motor, and returns the truck to the United States for the final rally and sale. Bring all of those countries home. There are 25 % tariffs on each other. This is a 25 % tariff.
The level of tariffs at that level will make it impossible for Ford to continue to build that truck. Perhaps by integrating manufacturing, you will continue to make use of the product line. As a business intention to make money, you will probably try to do so in the cheapest way as possible. And that means acceleration of the decrease in the US manufacturing industry and the number of available US -based work.
In the short term, consumers must pay more to the trucks to cover these four tariff costs, and in the long term, to cover the cost of manufacturing. Must pay. And it is the best case scenario. In the worst case, again, the customs duties must be very troublesome and Ford must be closed.
The bottom line is as follows. At best, customs duties mean you need to pay more to your products and services than you are now. And in the worst case, they were able to create a big economic disability.
Dylan Matthews has contributed to the report. For more information about explaining it to me, Please see the podcast。
