app.title

Tariff Policy

Topic

Economic policies related to taxes on imported goods. The Federal Reserve cited uncertainty around Trump's tariff policy as a reason for pausing rate cuts.

entitydetail.created_at

8/31/2025, 4:31:57 AM

entitydetail.last_updated

8/31/2025, 5:04:33 AM

entitydetail.research_retrieved

8/31/2025, 4:38:44 AM

Summary

Tariff Policy refers to the governmental strategy of imposing taxes, known as tariffs, on imported goods. Historically, tariffs have served multiple purposes in the United States, including generating revenue for the federal government, protecting domestic industries from foreign competition, and acting as a political tool in trade negotiations to address perceived unfair trade practices or safeguard national interests. In recent history, both President Donald Trump and President Joe Biden have utilized tariffs as a significant component of U.S. trade policy, targeting various products and countries like China, Mexico, and Canada, leading to increased tax revenue from imports.

Referenced in 1 Document
Research Data
Extracted Attributes
  • Mechanism

    Typically charged as a percentage of the price of an imported product, paid by the importer to the customs authority (e.g., U.S. Customs and Border Protection).

  • CRS Author

    Casey, Christopher A.

  • Definition

    A tax or duty imposed by a government on imported goods.

  • Optimal Tariff

    A tariff set to maximize the welfare of the country imposing it, potentially at the expense of the trading partner.

  • Type of Policy

    Protectionist trade policy.

  • Modern Purposes

    Raise government revenue, protect domestic industries, correct trade imbalances, serve as a political tool for negotiations, address perceived unfair trade practices, safeguard national interests.

  • CRS Product Number

    IF11030

  • Primary Purpose (Historical 1790-1860)

    Revenue generation for the federal government (accounted for approximately 90% of federal revenue).

  • Primary Purpose (Historical 1861-1933)

    Restricting imports to protect domestic industries.

  • Primary Purpose (Historical 1934-2016)

    Negotiation of trade agreements with other countries.

Timeline
  • Tariff policy in the U.S. primarily focused on generating revenue for the federal government. (Source: web_search_results)

    1790-1860

  • U.S. tariff policy shifted focus towards protecting domestic industries. (Source: web_search_results)

    1861-1933

  • The primary objective of U.S. trade policy, including tariffs, became the negotiation of trade agreements with other countries. (Source: web_search_results)

    1934-2016

  • President Donald Trump's administration implemented tariffs targeting products such as solar panels, washing machines, steel, and aluminum, and imposed a 25% duty on imports from Mexico and Canada (10% on Canadian energy products), and a 10% tariff on a vast array of Chinese products. (Source: web_search_results)

    Unknown (Trump Administration)

  • President Joe Biden's administration kept many Trump-era tariffs in place and increased them on certain goods, including Chinese electric vehicles and Canadian lumber, resulting in more tax revenue collected from tariffs than in Trump's first term. (Source: web_search_results)

    Unknown (Biden Administration)

  • Publication date of a version of the CRS Product Number IF11030, 'U.S. Tariff Policy: Overview'. (Source: web_search_results)

    2025-01-31

Web Search Results
  • What Is a Tariff and How Does it Work?

    Enacting tariffs or raising tariff rates are a way for governments to raise revenue, protect domestic industries, and/or gain political leverage over trading partners. Tariffs are a tool of protectionist trade policy, used to defend certain domestic industries against foreign competition. By imposing a tariff, the government aims to raise the cost of imported goods, thereby discouraging their consumption and encouraging production of domestic goods instead. [...] Tariffs in recent history President Donald Trump's tariffs policy in his first term targeted products such as solar panels, washing machines, steel, and aluminum. Former President Joe Biden kept many tariffs in place, even increasing them on certain goods such as Chinese electric vehicles and Canadian lumber. As a result, more tax revenue was collected from tariffs under Biden than in Trump's first term. [...] A tariff is a tax on imports. It's typically charged as a percentage of the price a buyer pays a foreign seller for an imported product, and it's paid by the importer—usually a domestic company—to the customs authority. In the United States, tariffs on incoming products are collected by U.S. Customs and Border Protection, which manages more than 300 ports of entry across the country. Who pays for the tariff?

  • U.S. Tariff Policy: Overview

    | CRS Product Number: | IF11030 | | Topics: | Trade & International Finance | | Publication Date: | 01/31/2025 | | Author: | Casey, Christopher A. | Download PDF (457KB) | PDF Version History [...] Image 3: Library of Congress Image 4: Copyright.gov Back to top Loading... [...] January 31, 2025 (IF11030 - Version: 14) January 31, 2025 (IF11030 - Version: 13) December 19, 2024 (IF11030 - Version: 12) December 19, 2024 (IF11030 - Version: 11) October 3, 2024 (IF11030 - Version: 10) February 22, 2024 (IF11030 - Version: 9) February 22, 2024 (IF11030 - Version: 8) February 28, 2023 (IF11030 - Version: 7) February 28, 2023 (IF11030 - Version: 6) January 6, 2022 (IF11030 - Version: 5) January 11, 2021 (IF11030 - Version: 4)

  • Q&A: What Are Tariffs and How Will They Affect Us?

    Following the Great Depression, the approach to tariffs changed and they became more of a tool to influence economic policy. More specifically, U.S. tariff policy shifted from a focus on revenue sources to a tool for trade policy, such as addressing perceived unfair trade practices, instruments in trade negotiations, protecting industries and safeguarding national interests. ### Q. How do U.S.-levied tariffs affect the nation’s economy? [...] A. A tariff is a levy or duty that a government imposes on imported goods. When a product crosses a country’s border, the government charges this fee before the product can enter the domestic economy. A tariff is essentially a type of tax on imported goods when they are brought into the country from abroad. [...] A. The new set of tariffs announced by the Trump administration represents a significant escalation in U.S. trade policy compared to previous measures. They are very broad in scope, imposing a 25% duty on all imports from Mexico and Canada, except for Canadian energy products, which will face a 10% tariff. A 10% tariff was also slapped on all imports from China aimed at a vast array of products. They are part of a strategy to address perceived unfair trade practices and concerns over

  • Tariff

    A tariff is called an \\optimal tariff\\ if it is set to maximise the welfare of the country imposing the tariff.( It is a tariff derived from the intersection between the \_trade indifference curve\_ of that country and the \\offer curve\\ of another country. In this case, the welfare of the other country grows worse simultaneously, thus the policy is a kind of \_beggar thy neighbor policy\_. If the offer curve of the other country is a line "Line (geometry)") through the origin point, the [...] government receipts. From 1861 to 1933, the growing reliance on domestic taxation shifted the focus of tariffs toward protecting domestic industries. From 1934 to 2016, the primary objective of trade policy became the negotiation of trade agreements with other countries. The three eras of U.S. tariff history were separated by two major shocks—the Civil War and the Great Depression—that realigned political power and shifted trade policy objectives.( [...] According to Douglas Irwin,( tariffs have historically served three main purposes: generating revenue for the federal government, restricting imports to protect domestic producers, and securing reciprocity through trade agreements that reduce barriers. The history of U.S. trade policy can be divided into three distinct eras, each characterized by the predominance of one goal. From 1790 to 1860, revenue considerations dominated, as import duties accounted for approximately 90% of federal

  • Tariffs 101: What are they and how do they work?

    Raise government revenue– tariffs serve as a source of income for governments. Protect domestic industries and correct trade imbalances– tariffs shelter domestic industries from foreign competition and discourage consumption of imported goods. Political tool for negotiations– tariffs can be used to apply pressure on the foreign government they are imposed on, as part of a trade negotiation or a political tool.