Tariff

A tariff is a tax on an import (or export) between different countries (or other borders). They can make things...awkward.

Tariffs can be used to try to artificially affect the global market by making importing or exporting certain things more expensive than they would be otherwise. This can help artificially (in the economic sense) prop up industries.

But tariffs aren’t that simple. For instance, the Trump administration put a 25% tariff on steel and a 10% tariff on aluminum imports, with some exceptions. This was great for American steel and aluminum producers. They used to have to compete with cheaper, imported steel and aluminum, but now that the imported stuff was more expensive, it became easier for them to sell their steel and aluminum to other U.S. businesses.

Which gets to who it wasn’t great for: those other U.S. businesses. Business that rely on a steady stream of cheaper, imported steel and aluminum all of a sudden experienced a price hike, dramatically affecting their businesses.

Who else is paying? American consumers. The businesses that have to pay more money for steel and aluminum will pass that extra cost onto consumers, making a ton of goods more expensive than they used to be.

You have to look beyond the immediate effects to the secondary and tertiary effects of a tariff to get the full picture.