Tariffs are in the news at the moment. Donald Trump just announced new tariffs on imports from Canada, Mexico, and China, sparking backlash and fears of a trade war. Here’s what tariffs are and what you need to know about them.
#Trump #tariffs #tradewars #China #Canada #Mexico #economy #explained
#Trump #tariffs #tradewars #China #Canada #Mexico #economy #explained
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00:00I always say tariffs is the most beautiful word to me in the dictionary.
00:04Tariffs, Trump's favorite economic buzzword.
00:07So what exactly is a tariff and how do they work?
00:10Simply put, a tariff is a tax that governments place on goods entering their country from
00:14abroad.
00:15Think of it as a fee for crossing the border.
00:17For example, if an American car company imports parts from Mexico, those parts are taxed when
00:22they arrive in the US.
00:23That's the tariff.
00:24But here's the kicker.
00:25This tax isn't paid by the foreign country.
00:28It's paid by the American company bringing in the goods.
00:30They do so by raising prices for you, the consumer.
00:34Now why does Trump love tariffs?
00:36For Trump, trade is a game of winners and losers and he thinks the US has been losing
00:40for decades.
00:41He often points to countries like China, Mexico and Germany, accusing them of unfair practices
00:46like stealing American intellectual property, manipulating their currency and flooding markets
00:51with cheap, subsidized goods.
00:54Tariffs to him are the ultimate weapon to fight back.
00:57Besides, tariffs were part of his promise to bring jobs back to American shores.
01:02His message to manufacturers was clear.
01:04Move production to the US and you avoid tariffs.
01:08It was a rallying cry for workers, in places hit hard by globalization and job losses.
01:13But here's the problem.
01:14Global supply chains are like Jenga towers.
01:17Move one piece and the whole thing could collapse.
01:20Building factories takes years and most companies can't simply pack up and move.
01:24That said, tariffs often just raise costs and consumers feel the pinch through higher
01:29prices.
01:30So are tariffs truly the most beautiful solution for America's economy?
01:34Well, the debate continues.