In one of the broadest uses of U.S. trade‐law authority in nearly a century, the Trump administration has slapped new “reciprocal” import duties on more than 60 countries, marking the highest average U.S. tariff rate since 1933
What Is a Tariff?
A tariff is a tax that a government places on goods imported from another country. When a tariff is imposed, foreign exporters must pay the tax before their products can enter the domestic market. The goal is often to protect local industries by making imported goods more expensive relative to home-grown products, to raise government revenue, or to exert economic pressure in trade negotiations.
United States (importing from…):
- EU, Japan & South Korea: 15% on most goods; negotiators are pressing for auto‐tariff clarifications, especially in Tokyo .
- India: 50% on a wide range of exports; New Delhi decries it as a “severe setback” for bilateral trade .
- Taiwan, Vietnam & Bangladesh: 20% across sectors, aimed at curbing export surges.
- Brazil & Switzerland: 50%, drawing protests from commodity exporters and financial services.
- Canada: 35% on goods outside CUSMA, triggering Ottawa’s legal challenge under CUSMA panels .
- Australia: Maintains a 10% baseline on most goods but faces proposed hikes—up to 250% on pharmaceuticals over time—that Canberra denounces as “deeply troubling” .
- China: Remains subject to ongoing Section 301 duties; the latest round paused amid a fresh 90-day negotiation truce.
European Union (importing U.S. goods):
- Alcohol & Pharmaceuticals: 15% on U.S. exports, with Ireland lobbying for carve-outs to protect whiskey and pharma chains, ahead of a formal EU–U.S. statement.
Other Major Economies:
- United Kingdom: Subject to a flat 10% on most U.S. imports under the new reciprocity scheme, though details are still being finalized.
- Mexico & Canada (CUSMA partners): Beyond the 35% on non-CUSMA goods, reciprocal measures on U.S. agricultural exports are under discussion.
Tariffs Matter to the Common Man because Tariffs increase the cost of imported products—from steel-based items like appliances and cars to consumer electronics and clothing. Retailers often pass those added costs along, meaning higher sticker prices for shoppers. Companies using imported inputs (e.g., auto manufacturers buying steel, electronics firms sourcing semiconductors) face increased production costs. They may downsize, cut hours, or raise wages more slowly to protect profit margins, indirectly affecting employment and wage growth. Trading partners often respond with their own tariffs on U.S. exports—hitting American farmers, manufacturers, and service providers. When dairy, soybeans, or aircraft face foreign duties, those U.S. exporters lose market share, which can hurt local economies, especially in rural areas. While tariffs may preserve some domestic manufacturing jobs, they can eliminate positions in industries that rely heavily on exports or on affordable imports. Research shows net employment effects vary by sector and region, creating winners and losers across the economy.
President Donald J. Trump dramatically expanded U.S. tariff use after taking office in January 2017. Claiming unfair trade practices by China, the EU, Canada, and Mexico, he invoked rarely used sections of trade law to impose broad duties. Trump framed tariffs as tools to defend U.S. workers and industries, coining the slogan “America First.” He believed that by raising costs on imports, foreign producers would negotiate better terms, reducing the U.S. trade deficit. The threat (or reality) of tariffs became central in Trump’s trade negotiations: the renegotiation of NAFTA into the USMCA, bilateral talks with China, and pressures on European auto exports. Critics argue this approach raised consumer prices and sowed uncertainty; supporters claim it secured concessions and revived certain manufacturing sectors. Though Trump left office in January 2021, many of his tariffs remain in place. Subsequent administrations have maintained some duties while exploring targeted relief for industries caught in the crossfire. As of mid-2025, debate continues over whether to roll back tariffs entirely, renegotiate with trading partners, or expand them to new sectors.
Tariffs are more than abstract economic policy—they directly affect what consumers pay at the store, the health of local industries, and the broader job market. While intended to bolster U.S. manufacturing, the ripple effects can raise everyday costs and provoke retaliatory actions abroad. Understanding the mechanics and motivations behind tariffs—and the prominent role Donald Trump played in popularizing their use—helps Americans gauge how future trade decisions may shape their wallets and workplaces.
