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Money: What Are Tariffs? 3 Ways They’ll Hurt Your Wallet
And possibly your everyday…
Assuming you haven’t been hiding under a rock for the past few months, you’ve heard the word on the news or seen it online.
All. The. Time.
Tariffs.
The president even coined a patriotic name for the kickoff date of his tariff barrage — April 2, 2025 — “Liberation Day.”
But what are tariffs?
Tariffs Explained
Tariffs are nothing more than an import duty or tax that the government charges on imported goods.
They can be “ad valorem,” a fancy term for charging a percentage of the goods’ value or a specific amount charged per unit. They can apply equally to every unit of the relevant imported good or start at a low level (or zero) and jump higher once a set quota is reached.
Who Pays the Tariffs?
Nominally, tariffs are not paid by the source country of the tariffed goods, but by the distributor or importer who brings them into the country that sets the tariffs, in our case, the US.
However, since distributors and importers are in business to make a profit, they tend to increase prices to recover the tariffs they pay (more on this…
