Intro to Tariffs: What are the effects?
Mixed Media by Caleb Lopata ’26 with images from Pexels
If you’ve been watching the news these past few weeks, I’m sure you’ve heard the phrase “tariffs.” But what are they, and what do they mean for us, the average consumer?
In the most basic terms, a tariff is a tax on imports. According to the BBC, these taxes are typically placed on products brought into one country from another. Governments impose tariffs to control trade between countries, protect domestic industries, and generate revenue. The idea behind tariffs is to make imported goods more expensive, encouraging consumers to buy domestic products instead.
The catch to tariffs is that companies do not usually absorb added costs; consumers pay for the increase. With the introduction of more intense tariffs under the new Trump Administration, everyday prices on many goods have increased. To many, tariffs are no longer the abstract concept they once were, and have become tangible.
For years, the United States has imposed tariffs on goods from countries such as Vietnam, Cambodia, and Thailand, indirectly targeting China’s businesses. These tariffs were often used as a negotiating tool in trade disputes or to counter unfair competition. Over the years, they’ve been employed to protect jobs, industries, and national security concerns, while also attempting to balance the playing field for domestic businesses.
Under President Trump, tariffs have become the standard for US trade policy, particularly trade with China. On April 2nd, also known as “Liberation Day,” Trump’s tariffs were implemented. According to CBS, the baseline tariff is 10%, but Trump’s tariffs are additive, so imports from certain countries will incur an additional tax. China has been taxed the heaviest, creating a trade war between the global powers. The Trump Administration believes that China’s trade practices, including intellectual property theft and unfair trade barriers, have harmed American businesses. The trade barriers alleged are China’s existing tariffs against the U.S. The Trump Administration hopes that the existing tariffs will be removed by imposing reciprocal tariffs; this is an attempt to shift global trade in America’s favor.
Data provided by BBC. Graphic created with Google Sheets software.
The most visible impact of tariffs is the increased cost of international goods. For instance, CBC states that Trump’s first-term tariffs on washing machines raised the median price by 11%, adding an average of $86 to the cost of a new unit.
But his first-term tariffs are far less consequential than the tariffs enacted on “Liberation Day.” The impact of these new tariffs will be more tangible in everyday life. Smaller companies will likely be the first to raise prices, followed by larger corporations.
These price hikes will be most visible in everyday consumer products, many of which are already projected to see a significant increase. One of the industries that will be most affected is the clothing industry. NBC predicts that consumers will pay 58% higher apparel prices in the short term and 26% higher in the long run. CNN predicts food prices are forecast to rise 2.8% overall. Yale Budget Lab estimates that tariffs will have a significant impact on American consumers, resulting in a substantial average decline of $3,789 in household income.
While Tariffs may be designed to protect American industries and challenge foreign trade practices, their immediate effect is felt most by everyday consumers. The rising costs caused by these new taxes directly impact household budgets nationwide, from clothing to food purchases. As prices continue to climb, the burden of global trade tensions doesn’t fall on the government or corporations alone—it lands on the American shopper.
Zarina Medeiros ‘26, the author, is a staff writer for The Grace Gazette.