What is a tariff and who pays it?

In his joint address to Congress, President Donald Trump is expected to lay out his America first vision, and *** major pillar of that is *** dramatic reshaping of US trade policy. Two of America's top trading partners, Canada and Mexico, now subject to sweeping 25% tariffs that took effect at midnight. President Trump has also said he would hike the tax on Chinese imports to 20%. The president using tariffs as *** pressure tactic to eliminate trade imbalances. And try to stem the flow of deadly fentanyl. The White House is moving forward with implementation despite recent steps from Canada and Mexico aimed at addressing those border security concerns. Now those countries are expected to retaliate, and President Trump and Canadian leaders traded threats on Monday. It's going to be very costly for people to take advantage of this country. They can't come in and steal our money and steal our jobs and take our factories and take our businesses and expect. Not to be punished and they're being punished by tariffs. If they want to try to annihilate Ontario, I will do everything, uh, including cut off their energy with *** smile on my face. They need to feel the pain. They want to come at us hard. We're going to come back twice as hard. Those comments rattling the stock market as businesses and consumers brace for impact. Many economists suggest that American shoppers could see prices go up on *** range of products because of *** trade war, but the Trump administration has sought to downplay concerns that this could lead to *** spike in inflation. Reporting on Capitol Hill, I'm Jackie DiFusco.

President Donald Trump fulfilled his promise to impose sweeping tariffs on America’s top three trading partners, Mexico, China and Canada.Collectively, these three countries shipped $1.4 trillion worth of goods to the United States last year, accounting for 40% of all the goods the U.S. imported, according to Commerce Department data.Effective immediately, all goods coming from Mexico and Canada, with the exemption of Canadian energy products, are subject to a 25% tariff. Goods coming from China are subject to a 20% tariff. As the countries vowed retaliatory tariffs on the U.S., Commerce Secretary Howard Lutnick said again Wednesday there may be some room for negotiation on the Mexican and Canadian tariffs.The tariffs, which Trump tied to stopping the flow of fentanyl into the U.S., threaten to significantly raise prices of goods at a time when the economy is already on shaky ground.Trump and members of his administration have often shrugged off concerns about the additional cost tariffs present for U.S. businesses, claiming foreign countries are the ones who pay for it. That’s not exactly true, though.Here’s what you need to know about tariffs:What is a tariff?The definition of a tariff is fairly straightforward �� it’s a tax on goods coming from another country.A tariff is typically structured as a percentage of the value of the import and can vary based on where the goods are coming from and what the products are.Who pays the tariff?Domestic businesses that import products into the country pay the tariffs up front, contrary to Trump’s claims that exporting nations foot the bill.The actual transaction occurs at the 328 points of entry into the U.S. designated by Customs and Border Protection to take in imports, including airports, railways, roads and ports.At those ports of entry, CBP agents collect tariff revenue from the domestic businesses importing the products, which is calculated based on how the merchandise is classified and where it came from, said Ted Murphy, a lawyer at Sidley Austin who specializes in advising businesses on customs compliance issues.Many importers use the government’s electronic payment system, which automatically deducts tariff from a designated bank account. It’s also possible to pay it all at once on a monthly basis rather than having it automatically deducted each time.But Trump isn’t entirely wrong in saying that other nations pay for tariffs levied on them, Murphy said. That’s because when businesses know they’ll have to spend more to import goods from one country versus another, they may decide it makes more financial sense to find a new supplier elsewhere or, in Trump’s ideal world, shift their production to the U.S.In either case, the economy of the country whose goods are tariffed can suffer from the loss of revenue, potentially resulting in job losses.However, exporting nations often don’t just accept tariffs without fighting back.

President Donald Trump fulfilled his promise to impose sweeping tariffs on America’s top three trading partners, Mexico, China and Canada.

Collectively, these three countries shipped $1.4 trillion worth of goods to the United States last year, accounting for 40% of all the goods the U.S. imported, according to Commerce Department data.

Effective immediately, all goods coming from Mexico and Canada, with the exemption of Canadian energy products, are subject to a 25% tariff. Goods coming from China are subject to a 20% tariff. As the countries vowed retaliatory tariffs on the U.S., Commerce Secretary Howard Lutnick on the Mexican and Canadian tariffs.

The tariffs, which Trump tied to stopping the flow of fentanyl into the U.S., threaten to significantly raise prices of goods at a time when the economy is already on shaky ground.

Trump and members of his administration have often shrugged off concerns about the additional cost tariffs present for U.S. businesses, claiming foreign countries are the ones who pay for it. That’s not exactly true, though.

Here’s what you need to know about tariffs:

What is a tariff?

The definition of a tariff is fairly straightforward �� it’s a tax on goods coming from another country.

A tariff is typically structured as a percentage of the value of the import and can vary based on where the goods are coming from and what the products are.

Who pays the tariff?

Domestic businesses that import products into the country pay the tariffs up front, contrary to Trump’s claims that exporting nations foot the bill.

The actual transaction occurs at the 328 points of entry into the U.S. designated by Customs and Border Protection to take in imports, including airports, railways, roads and ports.

At those ports of entry, CBP agents collect tariff revenue from the domestic businesses importing the products, which is calculated based on how the merchandise is classified and where it came from, said Ted Murphy, a lawyer at Sidley Austin who specializes in advising businesses on customs compliance issues.

Many importers use the government’s , which automatically deducts tariff from a designated bank account. It’s also possible to pay it all at once on a monthly basis rather than having it automatically deducted each time.

But Trump isn’t entirely wrong in saying that other nations pay for tariffs levied on them, Murphy said. That’s because when businesses know they’ll have to spend more to import goods from one country versus another, they may decide it makes more financial sense to find a new supplier elsewhere or, in Trump’s ideal world, shift their production to the U.S.

In either case, the economy of the country whose goods are tariffed can suffer from the loss of revenue, potentially resulting in job losses.

However, exporting nations often don’t just accept tariffs without fighting back.

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