Trump’s tariffs: What they are and how they would work

WASHINGTON » As a tool of national trade policy, tariffs had long been fading into history, a relic of 19th and early 20th centuries that most experts regarded as mutually harmful to all nations involved. But President Donald Trump has dusted them off in recent months and restored tariffs to a prominent place in his America First approach to the rest of the world.

Trump enraged U.S. allies Canada, Mexico and the European Union last week by slapping tariffs on their steel and aluminum shipments to the United States; most other countries have been paying the tariffs since March.

He has also threatened tariffs on up to $150 billion in Chinese products to punish Beijing for pressuring U.S. companies to turn over technology in exchange for access to the Chinese market. China has vowed to retaliate with tariffs of its own.

Trump has also asked the U.S. Commerce Department to look into imposing tariffs on imported cars, trucks and auto parts, arguing that they somehow pose a threat to U.S. national security.

Here’s a look at what tariffs are, how they work, how they’ve been used in the past and what to expect now: the total price from $500 to $532.50.

In the United States, tariffs

— also called duties or levies

— are collected by Customs and Border Protection agents at 328 ports of entry across the country. Proceeds go to the Treasury. The tariff rates are published by the U.S. International Trade Commission in the Harmonized Tariff Schedule, which lists U.S. tariffs on everything from dried plantains (1.4 percent) to parachutes (3 percent).

Sometimes, the U.S. will impose additional duties on foreign imports that it determines are being sold at unfairly low prices or are being supported by foreign government subsidies. It’s not always easy to match a specific product to a specific tariff or to keep up with which products from which countries are facing, say, special anti-dumping duties.

“It’s very complicated,” says John Brew, a trade lawyer at Crowell & Moring LLP. “The big companies will have staff that this is all they do.” of Management and Budget expects tariffs to fetch $40.4 billion this year.

Those tariffs are meant to increase the price of imports or to punish foreign countries for committing unfair trade practices, like subsidizing their exporters and dumping their products at unfairly low prices. Tariffs discourage imports by making them more expensive. They also reduce competitive pressure on domestic competitors and can allow them to raise prices.

Tariffs fell out of favor as global trade expanded after World War II.

The formation of the World Trade Organization and the advent of trade deals like the North American Free Trade Agreement among the U.S., Mexico and Canada reduced tariffs or eliminated them altogether. The average U.S. tariff is now one of the lowest in the world: 1.6 percent, the same as the European Union’s, the Pew Research Center reports.

“A lot of products are either free of duty or at a low rate of duty,” says Paula Connelly, a trade lawyer in Woburn, Massachusetts.