A LOOK AT HOW TARIFFS MIGHT WORK

What would Trump do?

Trump said he’d impose a 35 percent tax, called a tariff, on companies that close U.S. factories, cut American jobs, then relocate abroad and try to sell their products back to the United States. “Please be forewarned prior to making a very expensive mistake,” the president-elect tweeted.

Would that be legal?

Trump would likely need congressional approval to impose tariffs on a specific company or a group of companies, says Gary Hufbauer, an expert on trade law at the Peterson Institute for International Economics. He suspects that courts would block any such move if the president tried to do it himself. The president has broad authority to impose tariffs on specific categories of imported goods, but not to single out specific companies that make them, Hufbauer says.

What would tariffs mean to consumers?

Higher prices, most likely. Tariffs are charged at the border, and most importers likely would try to pass along as much of the higher cost as possible. Capital Economics estimates that the tariffs of 45 percent Trump has threatened to impose on Chinese imports would raise the price of those products an average of 10 percent. The Peterson Institute calculates that a 2009 tax on Chinese tires cost American consumers $1.1 billion in higher tire prices — equal to more than $900,000 for every job saved in the domestic tire industry.