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What are tariffs and why are they Trump?
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The media have recently been actively discussing tariffs and customs duties-after April 2, the 47th US President Donald Trump announced their introduction against most countries of the world. Although Trump later froze his decision for 90 days, questions to the economic policy of the Republican administration remain.
DOXA explains in accessible what tariffs are when they appeared, why they need Trump and how they will affect other countries.
What are the tariffs in general and when they came up with?
The tariff, or customs duty, is a tax on goods when they cross the state border. Duties are divided into imported (when importing goods to the country) and export (when exporting goods from the country). They are paid by the importer of the goods.
For example, if a phone worth $ 1,000 is taxed with a 20%tariff, then after crossing the border, its cost will be $ 1,200.
The economist and editor of the PoliteConomics channel Khazbi Budunov in a comment “replica” explains that although the idea of duties originated in ancient Egypt and Rome, in the modern sense they formed in the XVII - XVIII centuries - with the development of capitalism and the policy of mercantilism The economic policy that claims that the country should focus on the export of its product than import. As a result, the country should strive for a positive balance of trade balance - that is, buy more than selling. .
Why enter tariffs?
The main goal of duties is to increase the value of foreign goods for the consumer: NIC and importers. Budunov explains that historically this allowed domestic goods to compete in the market with foreign ones.
Theoretically, the introduction of duties can also protect the position of the employment: C in certain sectors within the country, to support the developing spheres of the economy that cannot yet compete in the world market, and become a response to dishonest trade practices from other countries.
At the same time, as Budunov notes, in the 21st century, duties become less effective due to close economic ties between countries, and their consequences become unpredictable. For example, in order to produce one automobile engine in the American state of Michigan, the parts first go to Canada, then to Mexico, and then return to the United States. If these countries introduce response duties on American goods, the cost of production will increase significantly, because tariffs will have to be paid on each border.
Why did Trump introduced tariffs?
In early April 2025, US President Donald Trump introduced tariffs against all countries of the world. According to Trump, the tariffs will stimulate the American: OK to buy domestic products and attract investments to the country.
Its goal is to make American goods competitive in price in the domestic market of the United States. According to Trump, foreign states, especially China, allegedly “plundered” the United States.
According to Budunov, the US president relies on the successes of the mercantilist policy of the late XIX - early XX centuries, when the United States became one of the richest countries in the world. In American historiography, this period is known as the “gilded age”. High import duties then helped the United States become an industrial power, protect the domestic business and create new jobs.
However, in modern conditions, this approach is at least problematic due to the complication of supplies chains-even for assembling a regular phone or computer within the United States, parts from Taiwan and other countries are needed.
The economist concludes that in Trump’s actions “it is very difficult to track any rationality”, and his approach is more “science-like” than “scientific”, and does not take into account many factors that will affect ordinary American: approx.
And if the American company is in another country and imported goods in the United States?
In this case, tariffs will continue to operate, explains Budunov. If the branch of the American company is abroad, it obeys the jurisdiction of the country on which tariffs are imposed.
This, as the economist notes, is one of Trump's key goals. The US President seeks to return American production back to the country to work in the domestic market. In his speeches, Trump also emphasized that the introduction of duties would allegedly create new jobs in the United States, and in combination with a decrease in taxes for American companies will lead to the opening of new enterprises.
Who will suffer from Trump's tariffs?
First of all, ordinary American consumers will suffer: nits. According to the study of the analytical center The Budget Lab, the introduction of duties will lead to an increase in expenses of the average American family by $ 1600–2000 a year. At the same time, prices for fresh products in American stores will increase by almost 3% immediately after the introduction of duties against Mexico and Canada.
Duties will also significantly affect the American auto industry. The price of each car produced in the United States will increase by $ 2500-5,000 due to imported components, and the price of imported vehicles will increase by 20 thousand dollars.
As Budunov notes in the commentary “replica”, some large American companies will receive limited benefits from duties. At the same time, there are not so many such corporations, whose business for the most part is in the United States. Among them are an expert: Ki is called Cleveland-cliffs, the largest manufacturer was in the United States, whose general director supported Trump's decision on tariffs. Jack Buffington, an expert in managing supplies from Denver University, also notes that in the long term this will help with forest -building and energy sectors.
Why did Trump handed back?
All these reasons led to the fact that on April 10, just a few hours after the start of the duties, Trump froze their introduction for 90 days for all countries, except China, for which the rate rose to a record 145%.
The reason for this was probably the pressure from some members of the Trump administration. To the "flexibility" on the issue of Trump's duties was called by the Minister of Finance of the United States Scott Immentan.
The decision to freeze duties could be called by American oligarchs. For example, Ilon Mask has a large factory in Berlin, and raw materials for electric vehicles are mined in the countries of the global south - in particular, cobalt in the Democratic Republic of the Congo. Apple shares also fell sharply after the announcement of tariffs.
Musk even publicly called the “moron” of Trump adviser Peter Navarro, an architect of the policy of high duties and the trade war with China.
According to Budunov, among economically: a rare consensus has developed against Trump's tariffs - both Keynesians and Marxists are opposed. The economist believes that after the end of 90-day frost, some duties can still be introduced, but not in the form that Trump originally planned.
How will tariffs affect China?
After Trump’s decision, the PRC leadership introduced response tariffs against the United States, which is 125%. Thus, the “trade war” resumed between the two countries, which began during the first term of Trump.
After increasing duties against China, the chairman of the Communist Party of China (CCP) SI Jinping went on a tour of the countries of Southeast Asia-Malaysia and Vietnam, which also seriously affected tariffs. There he signed a bilateral agreement with the leadership of Vietnam on mutual cooperation and counteracting US policy.
At the same time, Khazbi Budunov draws attention to the fact that over the past 10-15 years, China has been able to build a strong domestic market and is able to reorient its economy, including promoting Yuan in international trade.
“ Most likely, Trump's decisions will lead to a great restructuring of the world economy. And China will have to change his policy , ”says the economist“ replica ”.
Will Europe suffer from duties?
The European Union countries have long focused on the export of goods to other countries as the main model of the economy. For this, the association criticized, in particular, Trump.
“ The European Union was very, very bad with us. They do not buy our cars [...], they do not buy our agricultural products. They do not buy anything from us , ” said Donald Trump after the introduction of 20%duties against European countries.
According to Khazbi Tsurunov, this can play a cruel joke with the EU, since the consequences of the introduction of duties in European countries can be harder than in the rest of the world. They will lose sales markets in the United States, which will make economic policy less predictable.
Budunov indicates that many decisions within the EU are made unanimously and can be blocked even by one country. Such a scheme does not allow you to make quick decisions, including the introduction of retaliatory duties. It is also important to consider the fact that Trump has strong allies in the EU-Hungarian Prime Minister Viktor Orban and Italy Prime Minister Georgia Melony, who can impose a veto on any decision on potential reciprocal duties or other measures of economic deterrence.
Does Russia use tariffs?
Russia actively began to introduce tariffs after the annexation of Crimea and the outbreak of war in Ukraine in 2014. Then the leadership of the Russian Federation introduced duties on the import of food and import of cars.
In the short term, this led to the growth of the food industry, agriculture and automotive industry. However, in the long run in Russia there is a significant increase in prices for basic food products, while the quality of Russian cars remains uncompetitive compared to Western ones.
Budunov notes that as a member of the World Trade Organization (WTO), Russia is obliged to adhere to the principle of minimal trading barriers and is not so actively using duties as a tool for economic pressure.
What if not tariffs?
Tariffs are not the only way to develop the state economy. According to Budunov, there are alternatives that will more favorably affect the working class in the United States and bring less unforeseen consequences.
One of these methods is an industrial policy, which is a set of measures for the development and support of industrial production in a separate country. It may include tax benefits, subsidies, state investments, and the creation of infrastructure.
“ For example, in the“ rusty belt ”the United States lives many representatives of the working class who are without stable employment. The state could direct resources there for modernization of the region: to build factories, roads, bridges, thereby creating jobs , ”the economist explains.
Editor
Editor
Denis LevenPublication
April 17, 2025