Mia Buswell, Democracy Fellow (‘25 International Affairs)
Leading up to the election, tariff policies are an increasingly heated topic of discussion among presidential candidates and the media alike. Whether it is a universal tariff or a response to an accelerating trade war with China, it can be tricky to tell what exactly a tariff is, what each candidate’s approach to tariffs are, and if their proposals will hold true to their intended foreign and domestic policy goals.
What is a Tariff?
A tariff is a type of tax placed on goods made abroad coming into the country. For example, a pair of shoes made in one country and imported into the U.S. may face a tariff rate of five percent of the cost, or a fixed rate of two dollars per pair. Tariffs are paid for by importers – in this case American companies – who are buying the goods from abroad.
Why Tariffs?
While tariffs are paid for by American importers, the primary goal of implementing them is to protect domestic industries. When it costs more to buy a pair of shoes from a foreign company than a domestic one, consumers are more likely to buy at home. Tariffs can also protect domestic companies from unfair foreign trading practices, such as when governments dump a large quantity of their products into another country’s market at a lower price to push out domestic manufacturers.
What are the Risks of Tariffs?
When companies have to pay a higher price to import a good from abroad, they usually pass the cost onto consumers. This means that consumers will end up paying a higher price for the pair of shoes made abroad than without the tariff. In response, countries may impose retaliatory tariffs on U.S. industries. These both have the potential to increase inflation, where the prices of goods and services rise over time.
The Trump Campaign and Tariffs
The Trump campaign is in favor of increasing tariffs across the board, and especially on goods coming from China. Trump believes that raising tariffs will stimulate domestic industries, including the automobile sector, and will preserve the US dollar’s position as the world’s reserve currency. In some instances, such as with the automobile sector, Trump’s administration claims they will impose a 100 percent tariff on goods, and in some industries, that rate could be higher.
The Harris Campaign and Tariffs
The Harris administration has been critical of the Trump campaign’s tariff stance, highlighting the negative effects the high rates will have on consumers. However, it is unclear at this time whether Harris will change existing tariff policies, as many of the first-term Trump tariffs have remained in effect throughout the Biden administration.
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