Tariffs are making great news at this time.
This is what they are and what you need to know about them. Tariffs are an import tax.
Tariffs are generally charged as a percentage of the price that a buyer pays to a foreign seller.
In the United States, tariffs are collected by customs agents and border protection in 328 entry ports throughout the country.
The US tariff rates vary: they are generally 2.5% in passenger cars, for example, and 6% in golf shoes.
Tariffs can be lower for countries with which the United States has trade agreements.
For example, most goods can move between the United States, Mexico and Canada without tariffs due to Trump-Mexicocanada.
Conventional economists are generally skeptical of tariffs, considering them an inefficient way for governments to raise money and promote prosperity.
President Donald Trump, a tariff defender, insists that they are paid by foreign countries.
In fact, it is the importers, American companies, who pay tariffs, and money goes to the treasure of the United States.
Those companies, in turn, generally pass their highest costs to their customers in the form of higher prices.
That is why economists say that consumers generally end in the rate ticket.
Even so, tariffs can damage foreign countries by making their products more expensive and difficult to sell abroad. Foreign companies may have to reduce prices, and sacrifice profits, to compensate for rates and try to maintain their market share in the United States.
Yang Zhou, economist from the Fudan University of Shanghai, concluded in a study that Trump's tariffs on Chinese products inflicted more than three times more damage to the Chinese economy than the economy of the United States.
Trump has said that tariffs will create more factory jobs, reduced the federal deficit, lower food prices and allow the government to subsidize children care.
“Tariffs are ever invented,” Trump said in a demonstration in Flint, Michigan, during his presidential campaign.
As president, Trump imposed tariffs with a flowering: heading to imported solar panels, steel, aluminum and almost everything, from China.
“Tariff man,” he called himself.
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Trump has promised increasingly high rates in his second term.
The United States in recent years has gradually withdrawn from its role after World War II to promote global free trade and lower rates.
This change has been an response to the loss of American manufacturing jobs, widely attributed to the trade of trees without restrictions and an increasingly powerful China.
Tariffs are mainly destined to protect national industries
By increasing the price of imports, tariffs can protect their own harvest manufacturers. They can also serve to punish foreign countries for committing unfair commercial practices, such as subsidizing their exporters or seeing products at unjustly low prices.
Before the Federal Income Tax was established in 1913, tariffs were an important income driver for the government.
From 1790 to 1860, tariffs represented 90% of federal income, according to Douglas Irwin, an economist from Dartmouth College who has studied the history of commercial policy.
The tariffs fell out of favor as global trade grew after World War II. The government needed much larger income to finance its operations.
In the fiscal year that ended on September 30, the Government raised around $ 80 billion in rates and rates. That is a trifle along with the $ 2.5 billion that come from individual income taxes and the $ 1.7 billion of social security and Medicare taxes.
Even so, Trump wants to promulgate a budget policy that resembles what was in force in the nineteenth century.
Tariffs can also be used to press other countries on issues that It may or may not be related to trade.
In 2019, for example, Trump used the threat of tariffs as leverage to persuade Mexico to take energetic measures against the waves of Central American migrants crossing Mexican territory on their way to the United States.
Trump even sees tariffs as a way to prevent wars.
“I can do it with a phone call,” he said in a Rally in August in North Carolina.
If another country tries to start a war, he said he would issue a threat:
“We will charge 100% of rates. And suddenly, the president or prime minister or dictator or who demons is directing the country tells me: “Lord, we are not going to war.” “
Economists generally consider that tariffs must be self -sufficient
Tariffs increase costs for companies and consumers that depend on imports. They are also probable to provoke reprisals, such as movements, Canada has said that it is preparing in response.
The European UnionFor example, he hit Trump's tariffs on steel and aluminum by taxing US products, from Bourbon to Harley-Davidson motorcycles.
Similarly, China responded to Trump's trade war by slapping tariffs on US goods, including soybeans and pork in a calculated impulse to damage their followers in the agricultural country.
A study by economists from the Massachusetts Institute of Technology, the University of Zurich, Harvard and the World Bank concluded that Trump's tariffs could not restore jobs to the US heart. The tariffs “did not rise or lower the use of the United States”, where jobs were supposed to protect, according to the study.
Despite Trump's taxes in 2018 on imported steel, for example, the number of jobs in the US steel plants. Uu. It barely moved: around 140,000 remained. In comparison, only Walmart uses 1.6 million people in the United States.
Worse, retaliation taxes imposed by China and other nations on US goods had “impacts on negative employment”, especially for farmers, according to the study.
These retaliation rates were only partially compensated by billions to the aid of the government that Trump repaired to the farmers. Trump tariffs also damaged companies that depended on directed imports.
However, if Trump's trade war failed as a policy, he succeeded as a policy. The study found that the support of Trump and the republican candidates of Congress increased in the most exposed areas to import tariffs: the southern states of Midwest Industrial and manufacturing such as North Carolina and Tennessee.
