Understanding of Tariff

What is Tariff

A tariff is a tax on imported goods that is levied by a government. Tariffs are also known as customs duties

• Tariffs are usually a percentage of the value of a product. 
• The company that imports the goods pays the tariff to the government. 
• The company may pass on some or all of the tariff cost to the customer. 
• Tariffs are collected at the time of customs clearance at the foreign port. 

Tariffs are a central part of Trump's economic plans. He says tariffs will boost US manufacturing and protect jobs, as well as raising tax revenue and growing the economy.

Goods from China, Mexico and Canada accounted for more than 40% of imports into the US in 2024.

When he first announced plans for new tariffs, the White House said the president was "taking bold action to hold [the three countries] accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country".

Fentanyl is linked to tens of thousands of overdose deaths in the US each year.

The Trump administration says the chemicals come from China, while Mexican gangs supply it illegally and run fentanyl labs in Canada.

Canadian Prime Minister Justin Trudeau said his country was responsible for less than 1% of fentanyl entering the US, most of which comes from Mexico.