What a tariff is
A tariff is a tax applied to goods imported into the United States. It is collected by U.S. Customs and Border Protection when products enter the country and is generally paid by the importer of record — usually a U.S.-based company. That company may absorb the cost, pass it along to retailers and consumers, negotiate lower prices from foreign suppliers, or some combination of the three. Tariffs can be set as a flat amount per unit or, more commonly, as a percentage of the import's value.
Who sets tariff policy
Article I of the Constitution gives Congress the power to lay and collect duties on imports. Over the past century, Congress has delegated substantial authority to the president to adjust tariffs in specific circumstances. The Trade Act of 1974 allows the president to respond to unfair foreign trade practices, and Section 232 of the Trade Expansion Act of 1962 permits tariffs on imports deemed a threat to national security. Other statutes, including emergency economic powers laws, have also been invoked to impose duties. Courts have at times reviewed the scope of these delegations.
How tariffs are used in negotiations
Tariffs are often used as leverage in trade talks. The recent U.S.–European Union agreement is one example: most EU exports to the United States face tariffs capped at 15%, replacing the prospect of higher rates that had been floated during negotiations. The EU is the United States' largest combined trading partner in goods and services, with bilateral trade exceeding $975 billion in 2024, according to the U.S. Trade Representative. The size of that relationship is one reason such agreements draw close attention from businesses and policymakers.
The case for tariffs
Supporters argue tariffs can protect domestic manufacturers from foreign competitors that benefit from lower wages, weaker environmental rules, or government subsidies. They point to industries such as steel, aluminum, and semiconductors as areas where domestic production is tied to national security and supply-chain resilience. Tariffs also raise federal revenue: the Tax Foundation estimated in 2025 that broad new tariffs could bring in hundreds of billions of dollars over a decade. Proponents say tariff revenue can offset other taxes or fund domestic priorities.
The case against tariffs
Critics argue tariffs function as a tax that ultimately falls on U.S. importers and, in many cases, consumers through higher prices. They warn that tariffs can invite retaliation from trading partners, hurting U.S. exporters, especially farmers and manufacturers reliant on global supply chains. Studies from groups including the Tax Foundation, Peterson Institute, and Congressional Budget Office have generally projected that broad tariffs would reduce GDP growth, though the size of the effect varies by model and by which retaliatory measures are assumed.
What "primary tool" means in practice
Trade policy includes many instruments beyond tariffs: free-trade agreements, export controls, subsidies for domestic industries, investment screening, and participation in bodies like the World Trade Organization. Making tariffs the "primary" tool would represent a shift from the post-1945 U.S. approach, which generally emphasized lowering trade barriers through negotiated agreements. Voters weighing the question are essentially being asked how to balance protection of specific domestic industries and revenue collection against the cost effects and diplomatic trade-offs that tariffs can produce.
What to watch
Key indicators in the tariff debate include consumer prices for affected goods, manufacturing employment and output, federal customs revenue, retaliatory measures by other countries, and the terms of new trade agreements. Court rulings on the scope of presidential tariff authority and congressional proposals to reclaim or reaffirm that authority are also part of the ongoing policy landscape.