Tariffs

A tarriff is a tax that the government of a country levies on imported goods. The tax is often paid by the importer of the good. Tariffs are also called customs, import duties, or import fees. Tariffs work by increasing the price of the import. Those higher prices give an advantage to domestic products within the same market. They are used to protect a nation's industry.

To go farther into this explanation, I'll look at the world largest importer, United States of America. On March 8, 2018, the President [U.S.] issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018.

Before the steel tariff were imposed the countries exporting to the U.S. could make a deal. A country could reduce the imports by 60 to 70 and possibly avoid the 25% tariff. South Korea was able to make a deal with the U.S. avoiding the 25% tariff on all steel exports to America. If South Korea were not to have made the deal to import $10,000,000.00 worth of steel to the U.S., it would have to pay an additional 25% tariff. The $2,500,000 tariff most likely be paid by the consumer of South Korea steel.

"On average, consumers have to bear about half to two-thirds of the tariffs on imported products, according to economists. The rest is absorbed by U.S. companies and/or foreign exporters."

For more information on tariffs and the quote above please follow the link below.

What Are Tariffs Anyway?

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