Have been scouring public resources for a good comprehensive answer to “How Tariffs Work!” Last weekend with bad weather, multiple hours to no avail…. Yesterday at 11:18 AM a source was found – Yay!!
If you have interest, here is the link to the complete article…. it is an easy read! This is all from USA Facts a public non-profit founded by former Microsoft CEO – Steve Ballmer…
Here are the cliff notes with links for areas of specific interest!
Tariffs, sometimes called duties or customs duties, are taxes on goods that are traded between nations. When goods cross the US border, Customs and Border Protection (CBP) collects tariffs based on the type of goods, their quantity, and which country they’re coming from.
Who pays for tariffs?
In a literal sense, companies that are importing goods from international trade partners pay the tariff fees to CBP at the port of entry within 10 days. But as an economic policy, tariffs have implications beyond the money exchanged at the border.
According to the Bureau of Labor Statistics (BLS), this indirectly raises domestic prices on goods as supply-and-demand forces often push the burden onto consumers in the importing country.
How do tariffs impact prices?
In a supply-and-demand economy, when supply of a certain commodity goes down, prices tend to go up, because there is less of the commodity available to meet the demand. Tariffs, like all taxes, drive an economic “wedge” between what an importer pays and what an exporter receives as payment.
Tariffs, by design in some cases, lower competition on domestic sellers. If a buyer needs to pay more to import a good, more buyers may buy domestically or from another import partner, which means these sellers can increase prices. Artificially disincentivizing buyers from participating in international markets effectively shortens the global supply.
Since the 1960s, duties have not made up more than 2.0% of total revenue.
Have a Great “Tariffs Explained” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
