This article explains what tariffs are, how they work, and their impact on both domestic and foreign economies. It explores the arguments for and against tariffs, focusing on the economic theories and real-world consequences.
Tariffs are in the news at the moment. Here’s what they are and what you need to know about them.Tariffs are typically charged as a percentage of the price a buyer pays a foreign seller. In the US, tariffs are collected by Customs and Border Protection agents at 328 ports of entry across the country.
“Tariffs are the greatest thing ever invented,” Trump said at a rally in Flint, Michigan, during his presidential campaign. Before the federal income tax was established in 1913, tariffs were a major revenue driver for the government. From 1790 to 1860, tariffs accounted for 90 per cent of federal revenue, according to Douglas Irwin, a Dartmouth College economist who has studied the history of trade policy.
Tariffs can also be used to pressure other countries on issues that may or may not be related to trade. In 2019, for example, Trump used the threat of tariffs as leverage to persuade Mexico to crack down on waves of Central American migrants crossing Mexican territory on their way to the United States.“I can do it with a phone call,” he said at an August rally in North Carolina.“We’re going to charge you 100 per cent tariffs.
TARIFFS INTERNATIONAL TRADE ECONOMIC POLICY PROTECTIONISM US-CHINA TRADE WAR
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