ELI5: tariffs

// eli5

What is a tariff?

A tariff is like a special tax that a country puts on things coming from other countries [2]. Imagine if your town said "anything made in the next town over costs extra" — that makes things made at home seem cheaper by comparison, so people buy from local businesses instead [2].

Why do countries use tariffs?

Countries use tariffs to protect their own workers and businesses from competition [2]. If another country is selling things really cheaply, a tariff makes those imports more expensive, which helps local companies compete [3].

What happens when you add a tariff?

When a country puts a tariff on imports, the imported products cost more money in stores [5]. Sometimes this means people buy local products instead, or they might just pay higher prices [2].

Who pays for tariffs?

Everybody pays a little bit — stores pay the tariff, companies pay it, and customers often pay more when they buy things at the store [2].