In recent months, tariffs have become a big topic of discussion, but what are they? How do they affect the economy? Do they benefit the consumers? Why should the Kenwood community even care about economics?!
First, what is a tariff? The council on Foreign Relations shares, “Tariffs are a form of tax applied on imports to other countries.” Simply, when goods made in other countries are brought into the United States, the manufacturers are taxed.
Furthermore, tariffs are imposed by governments to “Raise revenue, protect domestic industries, or exert political leverage over another country.” (Nevil). It is believed that tariffs promote manufacturing in the U.S. and protect workers from competition. For example, an oversea company that utilizes poor working conditions will be able to manufacture goods cheaper and faster than companies in the U.S. that have proper working conditions.
The widely debated question is ‘do tariffs benefit consumers?’ KHS AP Economics teacher, Mrs. Rodier, states, “No, overall, there will be higher prices for an extended period of time as businesses push off the tariff cost to the consumer.” She continues to share that tariffs, “benefits the worker in that more jobs will ‘stay home’ and not move overseas and it will make the economy stronger which makes the consumers’ money ‘worth more’.” She concludes, “The companies will move home or have to lower costs to meet demand.”
In other words, tariffs will have a short term negative effect on the economy for consumers, but will have long term effects that will promote the United States economy for businesses and the consumers.
Overall, why is it important to understand the economy? KHS Social Studies teacher, Mr. Nash shares “Because as a voter you have to pick the party that you think is going to do the best job for the economy,” and understanding tariffs is one step closer to having economic proficiency!
We encourage the Kenwood community to stay informed on all topics, like tariffs and the economy, as we get ready to become future voters, consumers, and workers.
Sources:
Chatzky, A., Siripurapu, A., & Berman, N. (2024, June 21). What Are Tariffs? | Council on Foreign Relations. Www.cfr.org. https://www.cfr.org/backgrounder/what-are-tariffs
Nevil, S. (2024, April 1). What Is a Tariff and Why Are They Important? Investopedia. https://www.investopedia.com/terms/t/tariff.asp
