Since the 2024 election results became clear, there has been speculation and occasionally worry from the public on the president-elect’s plan for tariffs. How do tariffs affect the economy? What is Trump’s plan for changing them? Will prices go up or down?

“Prices will go up,” CNN business writer Allison Morrow stated in an opinion article on November 6. “How much and how fast is hard to know, but you can bet your bottom dollar you’ll be needing more dollars to pay for everyday goods if Trump’s sweeping tariffs are put in place.” 

This economic topic flew under the radar for many Americans before the election. Now, the ebb and flow of questioning and reassurance prompts the question—what are tariffs?

Tariffs, very simply put, are a form of taxes imposed on foreign imports that cover and establish transport fees. A business buying goods from another country pays that additional transport fee, although many economists agree that the fee gets passed on to and negatively affects consumers, according to USA Today. 

But tariffs are meant to provide a modest source of government revenue, as stated by the Council of Foreign Relations. They also protect local industries and businesses by driving consumers toward said industries instead of outsourced products. 

With that explained, what exactly does Trump plan on doing with them?

First, it’s important to look at the countries on which he aims to place and increase tariffs.

Canada, Mexico, and, with increasing tensions, China, have been major trading partners of the U.S. for a very long time. The president-elect has warned that he will raise tariffs on goods from Canada and Mexico by 25 percent, and will consistently raise tariffs on goods from China as soon as possible, reported the Harvard Gazette.   

During Trump’s first term, he signed the U.S.-Mexico-Canada Agreement, continuing the mainly duty-free trade between said countries. The law was established in 2020, but Trump’s potential plans could cut the agreement short. It is important to note that Trump has been reportedly having civil and relatively smooth meetings with Canada’s prime minister, Justin Trudeau, according to Reuters.

With China, tensions are higher. Both China and the U.S. have significant  economies that rely heavily on each other. China runs the most expansive trade surplus, while the U.S. holds the largest deficit. 

A Fox News writer reported that American investment bank Goldman Sachs predicted that tariffs on China will have the “most direct inflationary effect” on the U.S. The American public currently depends heavily on Asian products, most of which are manufactured by China. Tariffs here  could also potentially spark a trade war, which China’s decreased economic strength might not be able to handle, according to The Harvard Gazette. 

Trump himself has described these predetermined tariffs as a part of his “Put America First” strategy, and in many of his speeches he places a strong  emphasis on appealing to the working class. 

Ideally, the tariffs would bring manufacturing jobs back to the U.S., as opposed to potentially allowing the unethical labor practices of its trading partners that allow for cheap prices. It could also force harder in-depth negotiations with China and Mexico, a concept that appeals to people of all classes, as well as to many politicians. 

Essentially, Trump intends to use tariffs to repair and comb through foreign relations and the U.S.’s economic state. The future of economic trading politics is not entirely predictable, but it is clear that the American government has some important decisions ahead of it.

Article by Story Frazier-Maskiell