Tariffs have been all over the news lately, especially since the Trump administration made waves with plans to impose steep taxes on goods from Mexico, China, and Canada. But what exactly are tariffs, and why are they such a big deal? Let’s break it down.

In simple terms, a tariff is a tax on goods coming into a country from elsewhere. It’s usually calculated as a percentage of the product’s value and can vary depending on where the items are coming from and what they are. For example, a 25% tariff on Mexican imports means that for every $100 worth of goods, an extra $25 must be paid. Sounds straightforward, right? But here’s the twist: it’s not the exporting country that pays—it’s the businesses importing those goods into the U.S. who foot the bill upfront.

These tariffs can make everyday products more expensive for American consumers. Think electronics, clothing, or even food. But it’s not just about higher prices—domestic businesses could also take a hit if other countries retaliate with their own tariffs on U.S. exports. This back-and-forth can escalate into a full-blown trade war, with each side imposing new taxes in response to the other.

Recently, the U.S. delayed new tariffs on Mexico and Canada after negotiations, but a 10% tariff on Chinese goods went into effect, prompting China to retaliate with its own taxes on U.S. energy and metals. These moves can ripple through the global economy, affecting jobs, industries, and even diplomatic relations.

So, while tariffs might seem like a simple way to protect domestic industries, they come with complex consequences. As trade tensions continue to simmer, one thing’s clear: the impact of tariffs reaches far beyond the border.