Multiple rounds of tariffs may drive up prices for American consumers. A tariff is a tax placed on goods from other countries. The US government collects tariff money when goods arrive at a US port or other point of entry. Americans import trillions of dollars of goods each year. This means that many goods Americans buy will be impacted by tariffs.
A tariff is usually charged as a percentage. For example, a 20% tariff on a $10 toy will mean the toy now costs $12. The company that imports the toy will pay the $2 tariff to the US government. This costs the company more money. As a result, most companies will increase the price of the toy to offset what they paid.
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President Trump has been focused on tariffs since the start of his second term.
So, why do governments levy (charge or collect) tariffs if they cost consumers more money? One reason is that money collected from tariffs can pay for government services. Another reason is to protect American goods and companies. Increasing tariffs could push consumers to buy more American products because the imported goods are too expensive.
However, some goods cannot be easily grown or made in the United States. These goods include bananas and coffee. This is why we import them. Meanwhile, other goods are cheaper for companies to make elsewhere. Examples include products like sneakers and cell phones. This means that frequently there won’t be cheaper American products for consumers to buy. They will be forced to buy the pricier imported product or to go without it.
In early August, President Trump announced tariffs on more than 90 countries. Some countries had a tariff rate as low as 10%. Others, like Brazil and India, had a tariff rate of 50%. This means that coffee beans from Brazil that normally cost $8 could now cost $12!
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Foods made from chocolate will likely become more expensive in the coming months.
President Trump is not the first president to increase tariffs. In 2024, President Biden placed tariffs on several Chinese products. However, President Trump’s tariffs will impact far more countries and goods.
So, what kinds of goods could become more expensive because of tariffs? Experts say sneakers, board games, televisions, chocolate, and more. Americans import chocolate products from European countries. These could see increased prices, too. Many companies around the world warn that tariffs could make their products more costly for consumers.
Even American-made goods could see price increases. Cars assembled in the United States still include parts made in other countries. If tariffs make car parts more expensive, American car companies may need to increase prices. However, the full impact of tariffs is not yet clear.
What Do You Think? How could tariffs impact you?
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