Tariff

  

Categories: Tax

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.

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Finance: What is Gift tax?0 Views

00:00

Finance Allah Shmoop What is gift tax Of those I

00:08

Rs people They ruin everyone's fun You can't even give

00:12

away things anymore without it being taxed Even have some

00:15

t Khun spill into a harbor Boston gift tax party

00:18

Anyone know well so overly Simply as of two thousand

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nineteen you're allowed to give about fifteen grand a year

00:23

with the expectation that this number will rise a bit

00:26

with inflation year after year And on that fifteen grand

00:29

or less there is no tax owed You have to

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declare to the IRS people that you gifted but you

00:35

don't have to write them An incremental check and all

00:37

kinds of little tweaks to the definitions of givers and

00:40

receivers have made the state transfer easier in this country

00:43

For example of Family Khun Gift in multiple directions from

00:46

multiple sources like each year Mama Bear Khun Gift fifteen

00:49

grand to baby bear than fifteen grand too sulky teenager

00:53

texting bear then another fifteen grand Teo the Elder Bear

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for a total of forty five grand gifted from Mama

00:59

Bear tax free Then Daddy Bear can do the same

01:03

for each kid and the elder such that they can

01:06

gift in one year ninety thousand dollars total in gifts

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with no tax And there are other twists They aren't

01:13

limited to gifting Fax like they Khun gift art and

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jewelry and mountain vats of honey or porridge or privately

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appreciated stock like stock they bought for a dollar is

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now trading at fifty and they can give fifteen grand

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worth of that stock So Hugh may reasonably wonder how

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they would determine the value of private stock if it's

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not public or really any of the above None actively

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traded and valued things like jewelry and stuff like that

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Well there isn't a daily market for shares in private

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companies or artwork or jewelry Usually So how do you

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assess the value Well usually value is taken it whatever

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the last round was invested at by professional investors of

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its private stock even if it was five years ago

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and the company has gone up a ton in value

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But if it has well it's likely the company will

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have been required to get a new four o nine

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a valuation which is basically just a few high priced

02:02

lawyers assessing professionally what the company is worth based on

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other similar companies that were sold or funded recently It's

02:09

the best guess of lawyers and accountants and the same

02:11

applies to appraisals of jewelry and art And like if

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your parents are giving that stuff away to you too

02:17

willing to keep it under fifteen grand the arrest I

02:19

won't bug you So you can imagine that a family

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wanted to transfer as much as they possibly could to

02:24

their kids Will The impetus could involve a whole lot

02:26

of downward pressure on valuations such that the fifteen grand

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that was tax free gift herbal might really be worth

02:33

now something more like twenty grand or thirty grand or

02:36

maybe even fifty grand were it to sell that day

02:38

That is private valuations carry all kinds of risks The

02:41

gift ease as well Like if they want to sell

02:44

them like Mama thinks that jewelry a piece that was

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made for her is really worth thirty four thousand dollars

02:50

And he's getting away with something stating It's only worth

02:53

fifteen But then baby there goes to try to sell

02:55

it on eBay and gets like three grand for it

02:57

Well may be discounting private things make sense The key

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notion here is that fifteen grand of value can be

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transferred tax free legally Happily the IRS has no tax

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on that But above there there's all kinds of gift

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tax right So what happens if Mama Bear gives baby

03:12

bear twenty thousand dollars in cash one year You know

03:15

Tio enable the baby or to buy a top of

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the line Dr Braun's porridge warmer Well either Baby bear

03:20

can just pay income tax on the five thousand dollars

03:23

difference like fifteen grand was tax free and then five

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thousand above that that five thousand above it is taxable

03:29

as a gift tax And in fact it's Mama Bear

03:32

who would technically be legally responsible for paying that tax

03:36

on the five grand But baby Bear can do it

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if well you know if she wants or she can

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write Mama bear a check for five grand back and

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it's the net number that the IRS cares about There's

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all kinds of other gift taxes the president's change them

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limits and maximums all the time Currently a family Khun

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Gift in about eleven million dollars in change with essentially

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no estate tax when they died That protects the farms

03:59

in the Midwest from having to be sold When you

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know great Grandpa Joe dies and he on the farm

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for one hundred years That's how gift taxes air set

04:08

up And well if someone gives you a horse isn't

04:11

there a phrase about looking a gift horse in the

04:13

mouth You know be careful with those things by

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