It’s election week, and Vice President Kamala Harris and former President Donald Trump are making their final efforts to recruit voters. Of course, what concerns many Americans is the economy.

Politicians often campaign on economic promises, whether it’s cutting taxes, fighting inflation or creating jobs. But this election season, Americans have heard a lot about one type of tax: tariffs.

Harris said she would support targeted tariffs on clean energy components made in China. The goal is to make Chinese goods expensive, encouraging U.S. companies to buy domestically made goods instead.

Trump took a bolder stance, promising general customs duties of 10 to 20% on all importsin addition to increasing considerably existing customs tariffs on Chinese products. At a campaign event Monday, he announced his intention to impose tariffs on all goods from Mexico as a tool to pressure the nation to end unauthorized immigration across the U.S.-Mexico border.

“To me, the greatest word in the dictionary is tariff,” Trump said in a speech. speech last month at the Economic Club of Chicago.

Tariffs may seem less relevant to ordinary Americans than, say, income taxes or mortgage rates. But economists agree that the tariff policy promoted by Trump raise prices for American consumers, decline in household income and antagonize foreign governments economic retaliation.

Trump and his running mate, Ohio Sen. JD Vance, repeated several times during campaign events these prices only harms foreign governments. Economists disagree. In fact, most would say that American consumers bear the weight tariff costs.

Would you like to know more about prices? We’ve answered some of the general questions below, with help from Ajay Mehrotra, a professor of tax law and economic history at Northwestern University.

What is a tariff?

A customs duty is a tax imposed on a product when it crosses a national border. Customs duties on exports are outlaw in the U.S. Constitution, but tariffs on imports are implemented as a foreign policy tool, a source of revenue, and a way to protect domestic industries.

Who has the power to adopt/enact a tariff?

Under the Constitution, it is up to Congress to regulate commerce and impose taxes. However, the president can also adopt tariffs in cases of international security or economic crisis. Since a tariff law passed by Congress worsened the Great Depression, the power to impose tariffs largely shifted to the president. In fact, according to some interpretations, the executive branch can unilaterally impose trade restrictions.

Have other US presidents used tariffs to raise funds?

The prices were a main source of government revenue in the early years of the United States. But as the country grew, tariffs shifted from a way to raise revenue to a tool to stave off foreign competition, Northwestern’s Mehrotra said.

“If you use it as a tool for international trade, you don’t collect money, right? If the goal is to protect and keep the goods out, then no one buys them, so no one pays the tax,” he said. It also created conditions conducive to the formation of monopolies: with high tariffs making foreign products prohibitively expensive, domestic industries benefited from less competition.

Ultimately, the destruction of trust, the plea for fairer taxation and the need for war funds in the run-up to the First World War meant that in the early 20th century a progressive income tax was set up. replace customs duties as the main source of government revenue.

During his election campaign, Trump repeatedly said he wanted to emulate the tariff policies of President William McKinley, who served in office from 1897 to 1901. McKinley saw tariffs as a way to protect American industries foreign competition. But, for the most part, economists agree that they are outdated and ineffective. (They also agree Trump has misinterpreted and distorted the legacy of McKinley’s pricing policy.)

What products does the United States currently apply tariffs on?

During his last term, Trump imposed tariffs on steel and aluminum. The Biden administration replaced some of these tariffs with a quota system. Solar panels and washing machines have also been subject to tariffs under the Trump and Biden administrations.

Trump also unilaterally passed tariffs on billions of dollars of products made in China. Biden left some of these policies in place and, in May 2024, announced additional tariffs on products made in China, focusing more on industries that his administration has worked to build nationallylike electric vehicles and clean energy.

Who pays the rates? How do they affect me?

In the case of customs duties, importers pay the tax directly to the U.S. government. The nation that sent the goods pays nothing, despite what trump said. But who actually pays the price of tariffs is more complicated: Importers can raise prices to offset a tax, which effectively means that distributors, retailers or consumers pay the price.

“When Trump says he’s going to impose 100 percent tariffs on something like Chinese goods, and (he says) Chinese manufacturers are going to pay for it, we should be very skeptical of that claim .” Mehrotra said.

Trump-Biden tariffs reduced GDP, capital stock and employment in the long run, study finds. report of the Tax Foundation. He also estimates that these tariffs increased tax revenues by an average of $200 to $300 per household.

These are just the rates we already have. Independent studies by the Center for American Progress, the Tax Foundation, the Institute for Taxation and Economic Policy, the American Action Forum, and the Peterson Institute for International Economics have found, on average, that Trump’s aggressive 2024 tariff plan will add $3,954 to household costs per year.

Can other countries do anything about the tariffs imposed by the United States?

Imposing high tariffs on imports can have another consequence: retaliation. When Trump passed tariffs on aluminum and steel, Canada and the EU responded by increasing tariffs on imports from the United States. The same thing happened with goods exported by the United States to China. In fact, 92% of Chinese tariff revenue between 2018 and 2020 went to bail out U.S. farmers, who suffered losses due to retaliatory tariffs on U.S. agricultural products, according to the report. Council on Foreign Relations.

Economists and foreign policy analysts fear that if Trump imposes the tariffs he campaigned on, he could trigger an all-out trade war.

“All historical evidence shows that trade wars are not good. They are not good for international relations,” Mehrotra said. “There is good evidence that they also cause both domestic and global economic unrest and uncertainty. »

How do Trump and Harris’ tariff promises compare?

The tariffs are not covered by Kamala Harris’ official campaign promises. She, like Biden, is expected to support targeted tariffs on Chinese clean energy products. At campaign events, she called Trump’s tariff plan “aTrump sales tax.”

During his election campaign, Trump promised a blanket tax of 10 or 20 percent on all imports, as well as a Tax of 60% or more on Chinese products. The Peterson Institute estimates that such a plan would cost American families dearly. between $1,700 and $2,600 per yearand shifting the tax burden disproportionately onto low-income consumers.

Most recently, at a campaign event on Monday, Trump promised a 25-100% tariff on all goods from Mexico if the country does not prevent migrants from crossing the US-Mexico border. This eleventh hour announcement goes against a free trade agreement Trump signed with Mexico and Canada when he was in office.

Want to know more? Read or listen to our other pricing coverage:

Trump versus Biden/Harris:

How tariffs compare under the Biden and Trump eras

Economic issues take center stage during the presidential debate

The problem with Trump’s idea of ​​replacing income taxes with tariffs

Prices on Chinese products:

What is the state of economic relations between the United States and China?

How China’s New Tariffs Could Affect Prices for American Business Owners and Consumers

What do voters think of the Biden administration’s tariffs on China? – Walk

Steel and other metals:

Once again: who pays the customs duties on Chinese steel?

Higher tariffs may be bad for trade, but good for the environment

U.S., Europe working to reach new deal on tariffs

What companies think about prices:

Businesses have mixed feelings about the Biden administration’s new tariffs

Farmers look to Washington to ease inflationary pressure

DHL CEO talks about economic protectionism and the German economy

Why the US solar manufacturing sector can’t agree on pricing policy