an update as of April 3rd
With all the news about tariffs, I know it's easy to get lost. Here's what you need to know.
What is a tariff?
A tariff is a tax on goods coming in from foreign countries. So, a 10 percent tariff on Colombia means that imports from Colombia, such as coffee, will go up in price by 10 percent, and your morning latte or afternoon cold brew will now cost more.
Who pays for tariffs?
We do. Businesses pass along the cost of tariffs onto consumers. The White House has said they're projecting $6 trillion of revenue from non-auto tariffs in the next decade—that is coming directly out of our pockets. An independent analysis from Yale estimates that the average household will pay at least $3,400 annually for the tariffs announced yesterday.
Will tariffs come back down?
Normally, tariffs are adjusted as part of trade negotiations. That is, we agree to lower tariffs on foreign goods if other countries agree to lower their tariffs on American goods. But, the Trump Administration has said that these new tariffs are not part of a negotiation. That means they want to make prices go up permanently.
Why is the stock market tanking?
Higher prices as a result of tariffs will make it harder for companies to do business and for consumers to make purchases. If we continue down this path, we could be headed for a recession. Some economists are even putting the chance of a recession as high as 40 or 50 percent.
Is there anything we can do?
It isn't hopeless! This week, four Republican Senators crossed party lines to help pass a resolution repealing Trump's tariffs on Canada. But, the House is unlikely to take up this legislation—for now. Congress can act, but we need to speak up and get our elected representatives to make this a real priority.
I hope you were able to learn something about tariffs. Please share this information with your family and friends who could benefit from this explainer.
More soon,
Katie
