Desk Report,
121 days of Trump tariffs: Who pays the tariffs, where they go, what their impact is
After returning to power, US President Donald Trump started a new trade war. This time, one of his main tools is tariffs. He is using these tariffs to achieve several goals at once. Such as increasing government revenue, reducing trade deficits with other countries, and forcing foreign companies to produce products in the United States.
121 days of Trump tariffs: Who pays the tariffs, where they go, what their impact is
However, the question has arisen – who actually pays these tariffs, and where does that money go?
What exactly is a tariff?
A tariff is a government fee or tax that is imposed on goods imported from abroad. By paying these tariffs in the United States, importing companies, that is, not foreign companies, who are importing the goods, have to bear this additional cost. This money is deposited in the US Treasury Department (Ministry of Finance).
An example is Walmart’s shoes
Let’s say that the retailer Walmart imported a pair of shoes from Vietnam for $ 100. If the Trump administration’s new order imposes a 20 percent tariff on shoes, Walmart will have to pay $20 in tariffs to the US government.
Walmart can then take several ways to cover the additional costs. For example, it can force Vietnamese manufacturers to offer products at lower prices, reduce its own profits and bear the burden of the tariff itself, increase the price of the product and pass the cost burden on to consumers, or take a combination of several methods. President Trump and his advisers say that they are imposing tariffs on imports in such a way that it becomes expensive for foreign companies. This will force them to set up factories in the United States. As a result, employment and wages in the country will increase – this is the claim of the White House.
However, Trump has also said that the revenue from these tariffs can be used for various domestic expenses, including tax cuts.
Dissenting economists
According to economists, it is not possible to achieve these objectives simultaneously; rather, they often conflict with each other. For example, if on the one hand, the domestic industry is protected by imposing tariffs, then the production costs of many US companies that depend on imports increase. This makes them lag behind in competition.
Due to the tariff policy, the price of raw materials is also increasing, as a result of which domestic manufacturing companies are suffering. In short, the way tariffs are presented makes their impact in reality more complex.
Finally, in the United States, tariffs are actually paid by domestic importers, not foreigners. The burden of this cost ultimately falls on ordinary consumers. Although government revenue has increased, the adverse impact of these tariffs on other sectors of the economy is also becoming clear.
Timeline of Trump’s tariff policy: Sometimes imposed, sometimes lifted
President Donald Trump called tariffs ‘the most beautiful word in the dictionary’. During his first term, he imposed tariffs on a large scale. He issued an executive order on his first day back in the White House, promising to impose even more extensive tariffs in his second term. The order said that more new tariffs are coming as part of the US’s restructuring of the global trade structure.
In April, he announced a huge tariff package. Which covers almost all countries in the world. In addition, he has threatened new tariffs against one country or another on social media almost every day. Trump has used these tariffs to strengthen his position in international diplomacy. He has often presented incomplete or ongoing agreements as ‘major successes’. As a result of this uncertain and aggressive strategy, relations with many countries have become heated. Global markets have become unstable. Many industrial sectors have fallen into confusion.
The Trump administration’s tariffs were aimed at countries that export cars, electronic goods, groceries, alcohol, lumber and gas to the United States. According to analysts, imposing tariffs on these products will put additional pressure on the pockets of US consumers.
Now let’s see what happened when and where. Within hours of taking office, President Trump announced that a 25 percent tariff would be imposed on goods imported from Canada and Mexico starting February 1. The allegations were that these two countries were not taking enough measures to prevent drugs and immigrants from entering the United States.
