Many of US President Donald Trump's tariffs came into effect on Thursday, with varying rates being imposed on different countries. The EU, South Korea, and Japan are among the countries targeted by the levies.
The latest wave of "reciprocal" tariffs targets trade practices deemed unfair by Washington, expanding Trump’s measures to reshape global trade.
Analysts expect US businesses to pass along more of the bill to consumers. Tariffs are paid by the US company importing the good from overseas.
What are tariffs and why do they matter?
A tariff, or duty, is a tax paid on imported goods, though it can also apply to exports. It is usually a percentage of the item's value and is based on where the item comes from or what kind of good it is.
Import taxes are paid to the US government by the companies that bring goods into the country.
The United States just enacted varied tariff rates on dozens of America's trading partners, about 70 countries in total.
President Donald Trump says they will boost US manufacturing and protect jobs. The idea being that foreign goods will be more expensive, making locally manufactured products more competitive. The US government can also raise some revenue through tariffs.
Economists warn it could raise the US inflation rate as companies pass on some or all of their higher costs to American consumers. They also fear it could weigh on growth in the long run.
The US tariffs will also impact the global economy because they disrupt supply chains, raising production costs, and causing trade partners to retaliate. This will result in less trade, slower economic growth, and increased uncertainty in global markets.
