How do tariffs work?

An economic evaluation of US tariffs

Most economists agree that the implementation of large-scale tariffs on foreign goods would hurt both the American and global economies. This video from The Wall Street Journal explains the rationale for tariffs as a tool for domestic job creation, but explains why they may hurt the overall economy.

Tariffs are taxes levied on goods imported from abroad.

Policymakers make complex trade-offs when considering tariffs—while they can generate government revenue and encourage the consumption of locally produced goods, they can also lead to higher consumer prices and may negatively impact economic growth.

Tariffs are typically paid by the importing company or organization to the US Treasury.

The history of tariffs stretches back to ancient Rome and Greece, where taxes were levied on imported grain and textiles to control trade.

Tariffs once fueled the US economy, historically serving as a primary source of revenue and a means to protect domestic industries.

Listen to a podcast episode that outlines 250 years of world trade history.

Behind the scenes on tariff politics

Economist Gene Grossman joined the Trade Talks Podcast to discuss why tariffs really happen. The episode digs into how voters, politicians, lobbyists, and even campaign cash can affect when protectionist trade policies are put forward. Produced in 2019, the podcast also discusses how populist trade policies and identity politics accounted for Donald Trump’s victory in the 2016 Presidential election.

Read an overview of US tariff policy before the second Trump Administration

This comprehensive report from the Congressional Research Service explores the evolving role of tariffs—from a major source of government revenue to a tool for trade and foreign policy—providing insights into current practices, legal foundations, and global trade dynamics.

The overall economic effect of President Trump's 2025 tariffs remains unclear

Researchers from UCLA and Yale found that tariff revenue and gains to US producers largely offset importers' costs—but the broader picture is murkier, as the trade deficit rose, manufacturing jobs declined, and 90% of tariff costs were passed through to importers rather than absorbed by foreign exporters.

Track how American tariffs have impacted different countries and industries.

A trade war is an economic conflict where nations impose tariffs or other trade barriers on each other in retaliation for similar actions.

Revenue from tariffs goes to the US Treasury's general fund.

See a chart showing how US tariff revenue has grown in recent years.

Auto and consumer goods companies absorbed billions in costs due to President Trump's 2025 tariffs.

The Tariff Act of 1789 was one of America's first acts.

A brief video explainer on the US 'One China' policy

Wondering what the "One China" policy means? This four-minute explainer video delves into which nations recognize Beijing as the seat of the Chinese government and which recognize Taiwan as such. Meanwhile, the United States of America views Beijing as the true government while maintaining relations with Taiwan, including selling them arms to protect themselves.

Trump's 2025 tariffs represent a significant break from the rules-based trade order

The Trump administration imposed broad tariffs on other countries outside WTO rules in 2025, claiming that those countries had long violated trade agreements and that the US was simply leveling the playing field.

The Smoot-Hawley Tariff Act—which was passed during the Great Depression with the goal of reviving domestic industry—is among the most famous pieces of economic legislation in US history.

How tea gets made

Tea is one of the most consumed beverages in the world, and this video walks us through the process of supplying it from farms to our mugs. Workers handpick leaves, ferment them, and dry them as part of this involved operation. Follow along for a scientific understanding of the many steps it takes to produce tea and appreciate the detail and effort to create its flavor, aroma, and color.

Inflation explained in under 3 minutes

Keep seeing inflation in the news, but don't have a great grasp on what it means or how it works? This overview from 1440 breaks down how economists think about inflation, what it means for the average consumer, and how governments attempt to keep rising prices in check through various policies.

Watch this video to learn how US tax brackets actually work.

Watch a video that visualizes what really happens inside a credit card network when you make a purchase.

A visual summary of WWI

This animated video summarizes the "Great War"—World War I—tracing its progression through Europe, detailing the rise of nationalism in the middle of the 19th century until the signing of the peace treaties after 1918. This 18-minute provides a year-to-year accounting of the war with various helpful insights along the way.

The General Agreement on Tariffs and Trade and its successor, the WTO, was formed to reduce trade barriers between nations.

Global trade volume is roughly 45 times what it was when the General Agreement on Tariffs and Trade was founded

Since 1950, world trade values have grown nearly 410 times, mainly due to the successive tariff reductions negotiated under GATT and the WTO.

The GATT and its successor, the WTO, were established to lower trade barriers

Signed in 1947, the General Agreement on Tariffs and Trade began systematically reducing tariffs and trade barriers among member nations. In 1995, it was replaced by the World Trade Organization, which expanded those rules and established a formal dispute settlement system.

President Trump's 2025 Tariffs added less inflationary pressure to the economy than expected in their first year

A year after the so-called "Liberation Day" in April 2025, tariffs have had a milder effect on inflation than feared—core goods prices have added only about 0.2% to the headline Consumer Price Index—but persistent policy uncertainty has rattled small business owners, who say the constant back-and-forth makes long-term planning difficult.

What happens if the US doesn't pay its debt?

A video created during the debt ceiling debates of 2021 outlining what would happen if the US failed to meet its debt obligations. Its lessons are applicable to today's debates.

China vs. Taiwan, explained

Taiwan and China are separated by just 100 miles of water, but the distance between the two countries is farther than that. This 14-minute video details the history of their sovereignty dispute, and China's likelihood to use military tactics if they can't unify peacefully. The main problem there is that the United States has vowed to defend Taiwan, which could lead to an American-Chinese war.

Fast fashion companies such as Temu and Shein often took advantage of the de minimis exemption, a US tariff loophole that ended in 2025.

The history of the World Trade Organization

This episode of the "Brettonomics with Nancy Jackson" podcast explores the history of the WTO and its predecessor, the GATT, revealing the key people, negotiations, and decisions that shaped today's international trade rules.

What something costs is reflective of a balance in the market determined by the amount of demand relative to the supply of goods and services

Because economies are complex systems, a wide variety of issues influence this balance—including some things generally considered to be positive, like rising wages.

The US Mint created a video to show kids how coins are made

The video, made simple for children (or anyone who wants an easy-to-understand 101 video about the process coins go through to get in your wallet), outlines the entire process that a coin goes through in its lifetime, from Congress voting on new coins, to how coins are stamped, to their journey to a Reserve Bank.

How banking works

To do big things, people often need more money. Banks jumpstart economic activity with loans paid back with interest, and when things are working well, both people and the bank make more money. Formed in the Middle Ages amid competing currencies in Italy, banks—from the Italian for bench, banco—helped stimulate that era's commercial revolution, a massive expansion in Mediterranean trade and development. Find out the ins and outs of banks in this quick explainer video.

The Supreme Court ruled in February 2026 that Trump's emergency tariff powers didn't extend to imposing tariffs

In a 6-3 decision, the court held that the International Emergency Economic Powers Act—a 1977 law granting the president authority to regulate commerce during national emergencies—does not authorise the president to unilaterally impose tariffs, a power the Constitution reserves to Congress.

Why the rich don't pay taxes like you do

The system behind the US income tax isn't as straightforward as it looks. You earn money. Taxes get taken out. Case closed … right? Not exactly. In this episode of "1440 Explores," we break down how the US tax system actually works, from confusing deductions and misunderstood tax brackets to why the wealthiest Americans often end up paying a very different tax than everyone else.

Government shutdowns halt nonessential services and furlough federal workers

When Congress fails to pass a budget or stopgap funding, the government shuts down. This video explains which services stop, who is furloughed, and how shutdowns ripple through the economy and daily life.

What is CAR T-cell therapy?

A four-minute video about CAR T-cell therapy to help answer patients' questions: What is CAR T-cell therapy? How does CAR T-cell therapy work?

Visualize the components of fireworks

This article provides animated diagrams depicting how different parts of fireworks function. The elements work together through timed mechanisms to produce desired effects.

How do vaccines work? Watch this brief 101

Watch this under-3-minute video explaining how vaccines use the body's immune system to prepare our bodies against viral and bacterial threats to our health.

Patents arguably grant inventors monopolies for a short period of time

As a way to reward innovation, the government grants short-term monopolies on patented products. Patents block other companies from producing or selling that product, giving inventors the rights and opportunity to establish themselves in a market before other competitors enter.

Watch Ray Dalio explain how the economy works

Dalio describes the economy as a machine that runs on three main cycles: productivity growth, the short-term debt cycle, and the long-term debt cycle. Dalio says layering these three cycles on top of each other essentially creates a template for understanding changes in the economy.

Why does the stock market matter?

Open any newspaper, turn on your local TV news station, or listen to a daily business radio segment, and you’re bound to hear about how the stock market is performing. Netflix created a 17-minute (free) explainer that dives deep into the nitty-gritty of how we got here.

Despite the Supreme Court ruling that President Donald Trump's 2025 tariffs were unconstitutional, billions of dollars in refunds remain unresolved

Over 2,000 lawsuits seeking refunds have been filed by major companies, including FedEx and Costco, but CBP says its systems can't handle the volume. Interest on unpaid refunds is accruing at an estimated $650M per month.

Trade between the US and China has significantly increased in recent decades.

What a Chinese invasion of Taiwan would look like

If China invaded Taiwan today, it would not be an easy task. This four-minute video explores the obstacles and opposition the Chinese military would face during an attack on the island. Distance, Taiwan's military spending and training, and weaponry designed to oppose an attack from the sea are all factors that would prevent an immediate win by China.

Tax policy can have a direct impact on the national debt, with past presidents' changes to tax codes inflating the deficit.

See comparisons of different countries' taxation strategies

Taxes are a major revenue source for most countries, and how each government taxes citizens often reflects the country's economy. Developed countries tax at much higher rates than developing ones, and as a country grows its GDP, it also typically grows the proportional percentage of taxes it gains from its citizens.

The term 'wedding tax' is often used to refer to the extra money that many wedding industry suppliers charge

According to wedding vendors, the "wedding tax"—the additional money charged for goods and services specifically intended for a wedding rather than another type of event—stems from the increased amount of time and attention that someone like a florist or makeup artist spends on a wedding versus any other type of event. Unlike other events, weddings are often planned a year or more in advance and require more detailed planning and hours of communication.