Examples of US Tariffs [2025]

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A tariff is a tax on imports. When foreign goods cross America’s borders, U.S. Customs and Border Protection collects these fees from importing companies.

That simple definition masks a reality that shapes everything from the price of your morning coffee to the fate of entire industries.

Today’s tariffs aren’t about raising government revenue like they were for most of American history. They’ve become powerful weapons of economic warfare, wielded to protect domestic industries, punish unfair trading partners, and gain leverage in high-stakes international negotiations.

The numbers tell the story of this transformation. In the early 1800s, tariffs provided 87% of federal revenue. In fiscal year 2024, they contributed just 1.57%—about $77 billion out of total federal revenue.

How Tariffs Actually Work

When a shipment arrives at a U.S. port, the importing company must declare what’s inside to customs officials. This involves classifying each product according to the Harmonized Tariff Schedule of the United States (HTSUS), a comprehensive catalog maintained by the U.S. International Trade Commission.

The HTSUS is incredibly detailed, breaking down virtually every product into 99 chapters with specific tariff rates. It distinguishes between different types of milk based on fat content and assigns unique rates to various shoe styles, including golf shoes.

Three Ways to Tax Imports

Ad Valorem: The most common type, calculated as a percentage of the goods’ value. Most passenger cars face a 2.5% ad valorem tariff.

Specific: A fixed fee per unit, such as $2 per shirt.

Tariff-Rate Quota: A hybrid system where lower rates apply up to a certain quantity, then much higher rates kick in for everything above that threshold.

The importing company self-classifies goods, declares their value (including freight and insurance), and submits paperwork to CBP. Customs agents review documentation, perform occasional audits and inspections, then collect duties owed—typically within 10 days. All revenue goes to the U.S. Treasury.

Who Really Pays Tariffs

While U.S. importing companies write the checks to customs, the economic burden rarely stops there. A vast body of research shows these costs get passed on to other businesses and ultimately to American consumers through higher prices.

This happens through two main channels. First, tariffs are business expenses for importers. To protect profit margins, companies typically add tariff costs to wholesale prices. This higher cost ripples through supply chains to retailers and finally to consumers.

Second, tariffs reduce foreign competition, allowing domestic producers to raise their own prices without getting undercut.

A landmark 2023 U.S. International Trade Commission report on recent major tariff actions found that for both steel/aluminum and China tariffs, U.S. importers bore “nearly the full cost” because import prices rose in direct proportion to tariffs. This is called “full pass-through.”

A clear example occurred with 2018 washing machine tariffs. Studies found that prices of both imported and domestically manufactured washing machines rose significantly after tariffs were imposed.

The political claim that foreign countries “pay” tariffs oversimplifies economic reality. While foreign exporters might occasionally lower their prices to absorb some costs and remain competitive, overwhelming evidence shows the bulk of financial burden falls on domestic businesses and consumers.

From Revenue to Power: The Historical Transformation

Constitutional Foundation

The legal basis for all U.S. tariffs comes from the Constitution, which grants Congress power “to lay and collect Taxes, Duties, Imposts and Excises” and “to regulate Commerce with foreign Nations.”

For over a century after the nation’s founding, this power was used primarily to fund the federal government. Between 1789 and 1800, import duties provided 87% of all federal revenue, paying for everything from war debts to basic government operations.

The Game-Changing Shift

The critical transformation came with the Underwood Tariff Act of 1913, which not only lowered tariff rates but reimposed the federal income tax following ratification of the 16th Amendment.

This created a vast new revenue stream independent of trade volumes, effectively separating the federal budget from trade policy. Historically, tariffs had conflicting roles: raising money and protecting domestic industry. High protective tariffs could decrease trade and inadvertently lower government revenue.

The income tax resolved this conflict by providing stable, substantial funding. This freed tariffs from their primary fiscal constraint, allowing policymakers to raise or lower them for strategic goals—shielding industries, punishing trading partners, or gaining negotiating leverage—without triggering budget crises.

Historical Lessons: Two Pivotal Tariffs

The Tariff of 1789: Building a Nation

Following the Revolutionary War, the United States faced severe economic crisis under the Articles of Confederation. The government couldn’t pay war debts, and cheap European goods threatened to crush America’s small manufacturers.

Individual states tried levying their own duties, but this created a “commercial war between the states” as shippers simply rerouted to ports with lowest taxes.

One of the first laws passed by the new Congress and signed by President George Washington was the Tariff Act of 1789. Championed by James Madison, it had two urgent goals: generate reliable revenue for government solvency and protect America’s “infant industries” from foreign competition.

The act imposed duties on imported products and gave preferential treatment to American ships. U.S. vessels paid tonnage fees of 6¢ per ton while foreign ships paid 50¢ per ton—designed to build domestic merchant marine capacity.

The tariff immediately succeeded in raising revenue, providing the vast majority of federal income for over a decade. But its passage exposed a deep political fissure that would define American politics for generations.

Northern states with growing manufacturing interests favored high protective duties. Southern states with agricultural economies based on exporting cotton and tobacco while importing finished goods wanted low tariffs to keep costs down.

This fundamental conflict between industrial protectionism and agricultural free trade began with the very first tariff and echoes in trade debates today.

The Smoot-Hawley Disaster of 1930

If the 1789 tariff showed tariffs’ power to build an economy, the Smoot-Hawley Tariff Act of 1930 became a symbol of their potential to destroy it.

The act originated as a campaign promise to help American farmers struggling with low crop prices after World War I. But as the bill moved through Congress, it became a vehicle for widespread protectionism. Industrial lobbyists successfully pushed for tariffs on over 20,000 imported goods.

President Herbert Hoover signed it into law in June 1930, just months after the 1929 stock market crash. Smoot-Hawley raised average U.S. tariff rates on dutiable imports to nearly 60%—one of the highest levels in American history.

The global reaction was catastrophic. Despite a petition from over 1,000 economists urging a veto, the act triggered vicious retaliation cycles. Trading partners, unable to sell goods in the U.S. market to earn dollars for buying American products or repaying war debts, enacted their own punitive tariffs on U.S. exports.

Canada, then the largest U.S. trading partner, was among the first to respond. The result was a protectionist death spiral that collapsed global trade. Between 1929 and 1933, both U.S. exports and imports plummeted by over 60%.

While economists don’t blame Smoot-Hawley for causing the Great Depression, there’s broad consensus it significantly deepened the downturn and strained international relations.

The disaster catalyzed profound policy shifts. The 1934 Reciprocal Trade Agreements Act began delegating tariff-negotiating authority to the President, setting the stage for post-World War II trade liberalization.

Modern Tariff Powers: The President’s Toolkit

The Smoot-Hawley legacy led to fundamental restructuring of U.S. trade policy. Shifting primary tariff-setting power from Congress to the President was designed to insulate trade policy from local protectionist pressures that produced the 1930 disaster.

By empowering the executive branch to negotiate broad, reciprocal agreements, Congress aimed to focus on national economic interests in freer trade. For decades, this largely worked, leading to steady global tariff declines under GATT and the World Trade Organization.

But this delegation is double-edged. The same statutes granting presidents power to lower barriers can be used to raise them, often with little congressional input. Recent administrations have used these authorities not for targeted, small-scale actions they were designed for, but to impose sweeping tariffs on hundreds of billions in trade.

Four Main Legal Authorities

Section 201 “Safeguard” Tariffs: Provides temporary relief to domestic industries seriously harmed by import surges. Imports don’t have to be unfairly traded—sheer volume can trigger investigations.

The process begins with industry petitions to the U.S. International Trade Commission. If the USITC finds rising imports are a “substantial cause of serious injury,” it recommends remedies to the President, who has final authority to impose tariffs or quotas.

Section 232 “National Security” Tariffs: Grants presidential authority to restrict imports if Commerce Department investigations find they “threaten to impair national security.”

The statute provides broad national security definitions, including not just defense requirements but overall “economic welfare” and critical industry health. This expansive definition gives executives significant discretion.

Section 301 “Unfair Practices” Tariffs: Arguably the most powerful tool. Authorizes the U.S. Trade Representative to investigate and act against foreign government practices that violate trade agreements or are “unreasonable or discriminatory.”

If USTR makes affirmative findings, it can impose wide-ranging retaliatory measures, with tariffs being the preferred option. This was the primary authority for massive Chinese tariffs.

Antidumping and Countervailing Duties: Unlike broad presidential authorities, these are the most common and narrowly focused remedies. They’re quasi-judicial proceedings combating specific unfair pricing practices.

Antidumping duties target foreign companies “dumping” products—selling below “fair value” (typically home market prices or production costs). Countervailing duties offset foreign government subsidies allowing artificially low prices.

Real-World Impacts: Modern Tariff Case Studies

Washing Machines and Solar Panels: The Safeguard Story

In January 2018, the Trump administration imposed global safeguard tariffs on imported washing machines and solar panels. The action followed USITC investigations finding import surges were causing “serious injury” to remaining U.S. producers.

For washing machines, tariffs were the culmination of a years-long battle by Whirlpool against foreign competitors LG and Samsung. Whirlpool had repeatedly filed antidumping cases, only to see rivals engage in “country-hopping”—shifting production from South Korea to China to Thailand to Vietnam to evade duties.

The remedy was a tariff-rate quota starting with 20% tariffs on the first 1.2 million imported units and 50% on units above that threshold. Solar panels faced 30% tariffs, with both designed to phase down over time.

Washing Machine Impacts: A striking consequence was the effect on clothes dryers. Because retailers often price and sell washers and dryers as matched pairs, studies found dryer prices—which faced no tariffs—rose nearly as much as washers, about 12%.

This spillover effect doubled cost increases for consumers buying sets, who paid an estimated extra $86 per washer and $92 per dryer. The tariffs did spur domestic investment, as Samsung and LG built new plants in South Carolina and Tennessee.

But this came at significant consumer cost—$1.5 billion annually, translating to over $800,000 for each of roughly 1,800 domestic jobs created.

Solar Panel Trade-offs: Solar tariffs created stark industry divisions. Domestic panel assembly doubled as manufacturers exploited exclusions for the first 2.5 gigawatts of imported solar cells. But domestic cell production failed to increase.

Higher panel prices severely hurt the much larger installation sector relying on low-cost panels. Multiple analyses found that for every manufacturing job the tariffs supported, several jobs were lost in installation and related fields.

The Solar Energy Industries Association estimated tariffs resulted in net losses of over 62,000 U.S. jobs and $19 billion in private investment. Research concluded tariffs slowed overall renewable energy deployment, with solar demand 17.2% lower than it would have been otherwise.

Steel and Aluminum: National Security Justification

In March 2018, the U.S. imposed 25% tariffs on steel imports and 10% on aluminum imports, invoking national security under Section 232. The Commerce Department concluded global overcapacity, particularly from China, had led to low-priced import floods weakening the domestic industrial base.

The tariffs provide a textbook example of concentrated benefits and diffuse costs. The steel and aluminum industries were clear beneficiaries. A 2023 USITC report found the tariffs reduced steel imports by 24% and aluminum imports by 31% from 2018-2021.

This led to corresponding domestic production increases—$1.3 billion higher for steel and $0.9 billion for aluminum in 2021—plus investment surges with companies announcing nearly $22 billion in new or restarted facilities.

But these gains for relatively small sectors came at high prices for vastly larger industries using steel and aluminum as inputs. The same USITC report found higher metal prices caused downstream production—including auto manufacturing, construction, machinery, and beverage cans—to be $3.5 billion lower in 2021.

Economic studies calculated immense “cost per job saved” in steel. The Peterson Institute for International Economics estimated this cost between $650,000 and $900,000 per job—total cost increases for all steel-consuming businesses divided by steelworker jobs created or preserved.

The China Trade War: Section 301 in Action

Beginning in July 2018, the U.S. launched the largest-scale modern tariff action, imposing duties on hundreds of billions of dollars in Chinese goods. This used Section 301 authority based on USTR findings that China engaged in “unreasonable or discriminatory” practices to obtain American intellectual property and technology.

These practices included forcing U.S. companies to transfer technology for market access, directing Chinese firms to acquire U.S. companies for their technology, and conducting state-sponsored cyber theft.

Tariffs were implemented in four main tranches, ultimately applying additional duties of 7.5% to 25% on approximately $370 billion in annual Chinese imports. Targeted products ranged from industrial inputs like semiconductors and machinery to consumer goods including furniture, apparel, and electronics.

The 2023 USITC report found costs were “borne almost entirely by U.S. importers” through full pass-through. Companies faced choices between absorbing costs and accepting lower margins or raising customer prices.

The tariffs reduced Chinese imports by 13% while increasing U.S. production in affected sectors by just 0.4%. The Congressional Budget Office projected the tariffs would lower overall U.S. GDP and reduce average American household real income.

One analysis estimated tariffs imposed over $166 billion in direct costs on U.S. companies and consumers. They also accelerated global supply chain shifts, with many companies moving sourcing from China to Southeast Asian countries like Vietnam rather than returning manufacturing to the U.S.

Tariffs as Foreign Policy Weapons

Modern tariffs often serve as leverage in disputes extending far beyond trade, creating complex retaliation cycles where unrelated industries get caught in crossfire.

The Airbus-Boeing Aircraft Dispute

For nearly two decades, the U.S. and European Union battled at the World Trade Organization over claims of illegal subsidies to Boeing and Airbus. After the WTO authorized U.S. retaliation, the Trade Representative in 2019 placed 25% tariffs on $7.5 billion in EU goods.

The target list had little to do with aviation—it included French wine, Spanish olive oil, Italian cheese, and Scotch whisky. The goal was inflicting economic pain on high-profile European industries to pressure EU governments on aircraft subsidies.

The tariffs caused severe disruption for American small businesses—importers, distributors, restaurants, and retailers—whose business models depended on these products. Tariffs were eventually suspended in 2021 as part of diplomatic de-escalation efforts.

Agricultural Retaliation

When the U.S. imposes broad tariffs, trading partners often retaliate strategically, targeting politically sensitive sectors to maximize domestic pressure on American policymakers. U.S. agriculture has repeatedly been a primary target.

The most dramatic example was China’s tariff on U.S. soybeans. Before the trade war, China was the largest U.S. soybean market, purchasing about 60% of exports—over $12 billion in 2017. When China imposed 25% retaliatory tariffs in 2018, the market evaporated almost overnight.

U.S. soybean exports to China crashed to just $3.1 billion that year. A USDA Economic Research Service analysis estimated that from mid-2018 through 2019, retaliatory tariffs cost U.S. agriculture over $27 billion in lost exports. Soybeans alone accounted for 71% of that loss—an annualized $9.4 billion.

Economic pain was heavily concentrated in the Midwest, with states like Illinois and Iowa each suffering over $1 billion in losses. The government was compelled to provide billions in direct aid payments to farmers to offset retaliation damage.

This illustrates how American farmers can become economic casualties in international trade disputes that begin far from their fields.

The Economics of Protection

Concentrated Benefits, Diffuse Costs

Tariffs create a classic economic pattern: concentrated benefits for protected industries and diffuse costs spread across the broader economy. Steel tariffs provide clear benefits to steelworkers and steel companies. But the costs get spread across all steel-using industries and consumers, making them less visible but often much larger in aggregate.

This creates political dynamics where protected industries have strong incentives to lobby for tariffs, while the broader population bearing costs has less incentive to organize opposition.

Trade Creation vs. Trade Diversion

Tariffs can have two main effects on trade patterns. Trade creation occurs when tariffs genuinely bring production back to the U.S., creating domestic jobs and output. Trade diversion happens when imports simply shift from targeted countries to other foreign suppliers.

The China tariffs primarily created trade diversion rather than reshoring. Many companies moved sourcing from China to Vietnam, Thailand, and other Southeast Asian countries rather than returning production to America.

Dynamic Effects

Beyond immediate price impacts, tariffs can have longer-term effects on innovation, productivity, and competitiveness. Protection from foreign competition can reduce incentives for domestic firms to innovate and improve efficiency.

Conversely, temporary protection might give domestic industries breathing room to invest in new technologies and become more competitive. The challenge is distinguishing between productive “infant industry” protection and counterproductive permanent protection.

Modern Tariff Realities

Today’s tariffs operate in a fundamentally different economic environment than when they were created. Global supply chains mean that “foreign” products often contain substantial U.S. content, making tariffs partially taxes on American exports.

The iPhone provides a classic example. While assembled in China, it contains components and intellectual property from dozens of countries, including significant U.S. content. A tariff on Chinese iPhone imports is partially a tax on American innovation and components.

Measurement Challenges

Calculating tariff impacts is increasingly complex. Traditional measures focus on direct trade effects, but modern analysis must consider supply chain disruptions, trade diversion, investment effects, and productivity impacts.

The 2023 USITC report represented the most comprehensive analysis of recent tariff impacts, but even it acknowledged limitations in measuring economy-wide effects and long-term consequences.

Political vs. Economic Logic

Tariffs often follow political rather than economic logic. Industries with political clout in key states may receive protection regardless of economic efficiency. Agricultural states’ political importance explains why farmers receive substantial government support when hit by retaliation.

This political dynamic can make tariffs persistent even when economic analysis suggests they’re counterproductive. Once industries receive protection, they develop strong vested interests in maintaining it.

The Future of U.S. Tariffs

Tariffs have evolved from revenue-raising tools to complex instruments of economic statecraft. They reflect broader tensions between global economic integration and national sovereignty, between free market principles and strategic industrial policy.

Recent years have seen both major political parties embrace more protectionist approaches, suggesting tariffs will remain prominent policy tools regardless of electoral outcomes. The question isn’t whether tariffs will be used, but how they’ll be targeted and what economic and political trade-offs Americans are willing to accept.

As global supply chains continue evolving and economic competition intensifies, tariffs will likely become even more sophisticated instruments of international economic relations. Understanding their mechanics, impacts, and limitations is crucial for anyone trying to navigate an increasingly complex global economy.

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