TFK Explains: Tariffs

President Donald Trump has ordered that tariffs be imposed on goods from Canada, China, and Mexico. Here, TFK explains.

What is a tariff?

A tariff is a tax on an item imported, or brought in, from another country. For example, an American company may want to sell cars that are made in Germany. Since the cars would be brought into the U.S. from another country, the company would have to pay a tax. This tax is extra money that goes to the U.S. government.

Not all foreign goods have tariffs. The U.S. has made agreements with countries such as Canada and Mexico. American companies have been able to trade with these countries without tariffs. But those agreements may be changing.

Why is the U.S. government imposing tariffs?

The White House released a statement on February 1, saying that the new tariffs are meant to hold Canada, China, and Mexico “accountable.” Trump’s administration is demanding the countries fix issues relating to U.S. borders. If these countries agree to work with the U.S. on these issues, Trump has said he may reconsider the tariffs.

On February 3, the U.S. agreed to delay the tariffs on Mexican and Canadian imports for 30 days. This happened because the countries reached deals with the U.S. At press time, the tariffs on imports from China had been put in place.

Whom would the tariffs affect?

Tariffs can affect foreign countries by making their products harder to export and sell. They also affect American consumers, who can expect to see higher prices in stores.

What items would be more expensive with these tariffs?

The new tariffs target countries that currently supply the U.S. with a wide range of goods. Studies suggest that U.S. shoppers could see higher prices on items such as electronics, meat, and produce.

Produce imported from Mexico is displayed in a grocery store in San Francisco, California, on January 30.

What have been some reactions to the news?

Canada has said it will impose its own tariffs against the U.S. “We will stand strong for Canada,” Canadian prime minister Justin Trudeau said on February 1. China says it will also impose tariffs on U.S. goods.

Some U.S. business owners are worried. “I feel bad about always having to raise prices,’’ Zach Davis, co-owner of a California ice-cream shop, told the Associated Press. On social media, Trump wrote that the impact of the tariffs will be “worth the price.”

Stop and Think!

WHY do you think TFK wrote this news story in a question-and-answer format? In what other ways could the story have been told?