Tariffs are taxes levied on goods imported from abroad.

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

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.

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

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

How do tariffs work?

This brief animated video from Time walks through a simple example of a tariff on a single good, illustrating how this would affect the market for the good—both domestically and abroad—and who would eventually bear the cost of the tariff.

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

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.

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

Track how American tariffs have impacted different countries and industries.

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.

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

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

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

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.

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.

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

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.

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

Before the 16th Amendment, US tax law required direct taxes to be directly apportioned to a state's population

Due to these requirements, the federal government could not impose many direct taxes. Direct taxes include property and income taxes, whereas indirect taxes include duties and excises.

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.