Since day one of President Donald Trump’s second term, he has championed tariffs to renegotiate trade deals and emphasize bringing manufacturing and production back to America. 

Tariffs have been one of the most pervasive news topics over the past few months, especially since President Donald Trump was sworn into office. But what exactly is a tariff? What do they do, and why are they used? According to Monica Morlacco, assistant professor of economics at USC Dornsife College, “A tariff is a tax placed on goods when they cross national borders … Tariffs are typically imposed for protection or revenue purposes. A protective tariff increases the price of imported goods relative to domestic goods, encouraging consumers to buy from local producers, who are thus protected from foreign competition.”

Tariffs are usually a round percentage of the import’s value. They are used to boost production of certain goods inside the country and dissuade consumers and producers from spending money on goods from other countries. It is also a way to attempt to lower a country’s trade deficit, which occurs when the value of imports exceeds that of a nation’s exports. As of Feb. 28, 2025, the US’s trade deficit sits at $122.66 billion, down from $130.65 billion at the end of January, and up $24.6 billion from just December last year. The following events are a part of the Trump administration’s economic policy as reported by PBS News.

The proposed tariffs have changed and adapted over time, starting with a proposed 25% tariff on imports from Mexico and Canada and 10% from China signed via an executive order on Feb. 1. The tariffs on Mexican and Canadian imports were then put on a 30 day freeze to negotiate potential deals and an increase in both Canada and Mexico’s participation in border security measures. 

On Feb. 4, the 10% tariff on all Chinese imports went into effect, and on Feb. 10, the president announced a plan to impose a 25% import tax on all steel and aluminum imports. This was met by international scrutiny, in which other countries then proposed more tariffs of their own aimed at American imports, which then initiated a bona fide trade war as Trump proposed even more tariffs in retaliation for his own. 

On March 4, Trump’s 25% duties on certain imports from Canada and Mexico went into effect, and the 10% tariffs on goods from China doubled to 20%. In response, the three countries raised tariffs of their own. The next day, Trump granted a monthlong tariff exemption for automotive parts from Mexico and Canada to help ease production costs for major domestic car manufacturers. On March 6, Trump postponed the 25% tariffs on some of the imports from Mexico and Canada to ease tensions, but still announced plans for “reciprocal” tariffs on worldwide imports. 

On April 2, Trump announced plans for his worldwide reciprocal tariffs, a 10% base tariff on all imported goods, as well as increased tariffs on China, the European Union, South Korea, Japan, and more, with duties placed on imports from 57 countries in total. This announcement sparked mass speculation of a trade war, and as a result, markets suffered massive losses, the S&P 500 fell almost 12%, and the Dow Jones Industrial Average fell 11%. 

On April 9, the proposed heightened tariffs were implemented and put on a 90-day moratorium hours later. Even though the minimum 10% tariff on all imports was still implemented, this pause helped soothe the plummeting market and de-escalate the global trade war. China, however, increased its tariffs up to 125% in response to the Trump administration’s tariffs of up to 145%. As of April 10, the markets have steadily climbed due to the paused large tariffs, but the situation remains volatile. 

On May 4, Trump announced on Truth Social, that he planned to implement a tariff on foreign movies by claiming, “I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”

On May 12, after multiple rounds of negotiations between the U.S. and China, CNN reported, “The U.S. will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%.” This 90-day pause is part of the Trump administration’s effort to renegotiate trade deals and avoid an all-out trade war.