this post was submitted on 06 Apr 2025
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Explain Like I'm Five
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But what is a tariff? What does it do?
It is an extra charge on top of products from overseas that is paid to the government.
If you were a small island and you had farmers that can't compete with grain from other countries, you could either subsidize them or have a tariff on grain from overseas. First would lower the price of produce they would make, so they can compete, second would raise the local price of overseas product so they can compete. Both are valid strategies in niche situations.
Thanks for that... tbh I'm neurodiverse so I need it broken down a bit simpler if that's ok?
The big thing to realize is trump and his cult seem to think the exporter (country of origin) pays the tariff to the importing country’s government. Where it actually is paid by the person who imports the item passing the tariff to their government.
If you are in the US and buy a 24% tariffed item from another country you are responsible to pay your government that 24%.
Now imagine you manufacture cars here in the states, but of you 1000 need components to build that car 825 of them are imported. You have to pay for each of those taxes tariffs, increasing the cost of something manufactured here.