What are tariffs and how do they work?

President Donald Trump It moves to impose or threaten higher tariffs on countries like China, Canada and Mexico – three major business partners in America. They raised questions about what tariffs and how they affect consumers.

Trump has signed executive orders last weekend, 25% tariffs from Canada and Mexico, at a lower 10% tariff exchange rate applies to Canadian energy products. These tariffs were postponed at least a month after Canada and Mexico, drug smuggling and illegal immigration along with the United States along their borders

He also added tariffs on the whole board of goods imported from China. These tariffs entered into force on February 4, and the Chinese government announced answering tariffs on certain US energy exports and adopted other punitive means, including anti-monopoly outflow of rare land minerals.

Tariffs are taxes charged on imported goods and services. Although they have historically played a more important role in the introduction of federal tax revenues, developed countries have left the tariffs as a main source of funding, salaries, salaries or sales taxes.

What’s going on with Trump Tariffs on China, Canada and Mexico?

President Donald Trump has raised tariffs in Canada and Mexico, as well as in Canada, which he referred to those countries from those countries (Photo: Chip Somodevilla / Getty Images / Getty Images)

After World War II, the global trading system has been transferred to the rules for tariffs, which was initially established by a general tariff and tax agreement (GATT), which later became the Research Service of the Congress. :

The system created by GATT and WHO created rules on how countries can use tariffs for commercial partners, as well as resolve disputes and arise when countries enter a response cycle against each other.

It has contributed to the decline in global tariffs, as well as the expansion of US exporters markets. According to CRS, US exports increased by more than 160%, which has been approved for inflation, since the moment of establishment of the WTO.

Voters reject Trump’s tariff push. Many people think that politics will damage the economy

“Buying Canadian instead” is displayed on top of bottles, depending on another sign that reads “American whiskey” after the announcement of the Canadian tariffs. (Reuters / Chris Helgren / Reuters)

Who pays for tariffs?

Companies that import goods covered with tariffs Pay for a tariff When these products enter the country of importer.

Tariffs in the United States are collected by Customs and Border Protection (CBP), which is a subordination of the Department of Security of the Fatherland. Trump offered to create “External income service“It will be responsible for collecting tariffs, although it is not clear that this plan will move forward.

Tariffs increase the price of products to the import company, which should then decide to raise the prices paid by consumers to maintain the margins of their profits or relatively stable.

In some cases, an exporting company may consider its market share, reducing its prices to help importers to deal with tariffs, which is subject to tariff demand.

Canada announced border security measures prompted to postpone the tariffs for Canada’s goods for at least one month. (Kamara Morozuk / Bloomberg Getty Images / Getty Images)

Trump Tariffs warn of trade groups

“It really depends on the sensitivity of the product price,” Brandon Parsons, the economist of Foxdine University Graziadio, told Fox Business in an interview.

“For the manufacturer, which has many levers. Consumers really want to buy their products, and there is an imperceptible requirement, such as the iPhone, which can still increase the price, “Parsons said.”

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“Other products where consumers are more sensitive, and there are many substitutes, there is a lot of competition, then the manufacturers will simply become their margins. Re losing the market share, losing demand, but just eating a little, because it refers to their margin, so their total profitability has been reduced, “added their total profitability.”