Menu
HARIK THOMPSON CPAs
  • About
    • Team
      • Patricia Harik
      • Kevin Thompson
    • Affiliation
  • Services & Industries
    • Accounting Services
    • Business Consulting
    • Entertainment Industry
    • Estates and Trusts
    • Financial Planning
    • International Taxation
    • Tax Strategies
  • Insights
  • Resources
  • Payments
  • Contact
  • About
    • Team
      • Patricia Harik
      • Kevin Thompson
    • Affiliation
  • Services & Industries
    • Accounting Services
    • Business Consulting
    • Entertainment Industry
    • Estates and Trusts
    • Financial Planning
    • International Taxation
    • Tax Strategies
  • Insights
  • Resources
  • Payments
  • Contact

What's the Story on Tariffs?

9/26/2018

 
​A tariff is money collected at the border by a governing authority on goods entering or leaving a country; it's focused on a specified industry or product. A steel tariff on Canada, for example, is supposed to increase business for U.S. steel companies because Canadian steel mills will have to pay an import tax when the product arrives at the U.S. border.
The United States has recently imposed tariffs on products from other countries, which in theory would help U.S.-based producers, while possibly raising prices. Canada and other countries — China, Mexico and the European Union (EU) — have placed or have threatened to place retaliatory taxes on U.S. products. This may lead to a "trade war" as different countries try to top each other in defending themselves.

There are economic and emotional arguments on both sides as to whether a nation is better off when goods flow freely or when protection of local businesses is more important. Globally, though, tariffs have been close to their lowest levels, averaging around 2.9 percent, falling for decades due to free-trade agreements.

For now, tariffs are mainly impacting the companies selling and buying taxed goods — automobiles, tractors, appliances — everything made from metal (even nuts and bolts). But economists fear that, as with any tax, it will come back to the consumer as producers pass the costs onto the people who buy the finished products. Companies will look for other ways to cut costs, affecting jobs in the future.

As our largest trading partner, economists note that the EU has the economic influence to hurt U.S. consumers. Reasons given for adding tariffs include protecting intellectual property and limiting threats to national security. But the tit-for-tat aspect of tariffs becomes mutually harmful to all nations involved.

Tariffs, also called duties or levies, discourage imports by making them more expensive and reducing competitive pressure on domestic suppliers, allowing them to raise prices. But economists say trade restrictions make the economy less efficient.

The current round of tariffs is expected by economists to result in a modest drag on U.S. growth. U.S. companies are concerned about the impact of tariffs on their supply chains and input costs. Tariffs can be pulled if governments realize they're causing actual harm to the industry they're trying to protect.

Do tariffs destroy domestic jobs or protect them? While in the short term, the effect is to save jobs, in the long run, the opposite may happen. The president announced $12 billion in aid to help farmers affected by retaliation against U.S. soybeans and other agricultural goods. Now, other industries are calling for their share of funds as they are on the brink of closing plants. Tariffs are supposed to help our trade deficit and bring more money into the Treasury.

However, not all think that such aid is a solution, believing that targeted exclusion of certain key raw materials might be a better solution. Support for a given position is dependent heavily on geography, as some states are more economically dependent on imported materials than others are.
​
While tariffs have been a constant subject of news over the past several months, it's clear that they will continue to grab our attention in the coming months.

Comments are closed.

    Newsletter articles are posted every 2 weeks. ​

    If you would like to have our e-newsletter delivered directly to your inbox, please sign up. Your information is confidential; you can unsubscribe at any time. Subscribe.

    Categories

    All
    1040-X
    1099 Form
    2021 Adjustments
    401Ks And IRAs
    529 College Savings Plans
    941 Form
    ACA Affordable Care
    Accounts Receivables
    ADA Americans With Disabilities Act
    Alternative Minimum Tax
    Annuities
    ASC 606
    Audits
    Back Pay
    Backup Withholding
    Bankruptcy
    Basis
    Benefit Transfers
    Blockchain
    Bonuses
    Budgeting
    Business Closure
    Business Deductions
    Business Interest Expense
    Business Interruption Insurance
    Business Structure
    Business Tips
    Capital Gains
    CARES Act
    Cash And Accrual
    Cash Flow
    Charitable Gifts
    Commercial Real Estate Vacancies
    Communication
    Compensation
    Coronavirus
    Coronavirus Relief Package
    Credit Cards
    Credit Score
    Crowdfunding
    Death And Debt
    Debt
    Deductions
    Depreciation
    Disaster Relief Payments
    Disaster Tax Break
    Diversity Training
    Dividends
    Divorce
    D&O Insurance
    Dollar Cost Averaging
    Down Payment
    Dress For Success
    Earned Income Tax Credit
    Economic Injury Disaster Loan
    Education Credits
    EIN Employee ID Numbers
    EITC
    Elder Mediation
    Employee Direct Deposit
    Employee Leave
    Employee Overpayment
    Employee Ownership
    Employee Pay
    Employee Retention Credit
    Employees Cross State Lines
    Employee Taxes
    Employment Record Keeping
    Employment Taxes
    Entertainers
    ESOP
    Estate Planning
    Estate Taxes
    Estimated Taxes
    Executor
    Expenses And Depreciation
    Expensing Rules
    Family Businesses
    Family Leave
    FATCA
    Federal Excise Tax
    Fiduciary
    Filial (Adult Child) Responsibilities
    Filial Responsibility
    Filing Status Options
    Financial
    Financial Advisor
    Financial Planning
    Flood Insurance
    Floods
    Foreign Earned Income
    Franchise Ownership
    Fraud
    Freelancing
    Furloughs
    Harik Thompson Merger
    Headcount Reporting
    Health Care
    Health Savings Account
    HIPAA
    Hiring Compliance
    Hiring Help
    Hiring Tax Credits
    Hoaxes
    Hobby Vs. Business
    Home Equity Loans
    Home Office Deduction
    Homeowners
    Homeowners' Deductions
    HSA
    Hurricanes
    IC-DISC
    Identity Theft
    Income Tax
    Independent Contractors
    Inflation
    Information Return
    Inherited Mortgage
    Innocent Spouse Rule
    Insurance
    Intestate
    Inventory Management
    Investing
    Investors For Your Business
    IRAs
    IRS CP2000
    IRS Disagreements
    IRS Identity Protection PIN
    IRS Representation
    IRS Rights
    Joint Tenancy
    Key Performance Indicators
    Kiddie Tax
    Layoffs
    Lease Accounting
    Leave
    Legacy
    Life Insurance Trusts
    Loans
    Long Term Care Insurance
    Managing Employees
    Market Capitulation
    Marriage Penalty
    Maternity And Paternity Leave
    Medicaid Trust
    Medical And Dental Deductions
    Medicare
    Mergers
    Mileage Rates
    Morale
    Mortgages
    Multistate Taxes
    Myers-Briggs Personality Types
    Net Investment Tax
    Net Pay
    New
    Newsletters
    New Tax Law
    Noncompete Agreements
    Operating Loss
    Opportunity Zones
    Organize Your Finances
    OSHA
    Outsourced Accounting
    Overtime Exemption
    Padding
    Pandemic Planning
    Papers For Taxes
    Part-time Help Tax Rules
    Passwords
    Payable On Death Accounts
    Paycheck Protection Program
    Payday Changes
    Payday Frequency
    Payroll Cards
    Payroll Scams
    Payroll Taxes
    Pensions
    Personal Finances
    Power Of Attorney
    PPP Loan
    Private Tax Debt Collection
    Profit Sharing
    Property Taxes
    Protecting Wealth
    QSEHRA Benefits
    Quarterly Tax Returns
    R & D Tax Credit
    Real Estate 1031 Exchange
    Real Estate Held In IRA
    Real Estate Investment Trusts
    Reciprocal Agreements
    Records
    Recovery Rebate Credit
    Referral Program
    Rehiring Staff
    Remote Employees
    Reporting
    Reputation
    Retirement
    Revenue Recognition
    Reverse Mortgage
    Sales Tax
    SBA Loans
    Schedule C
    S Corporations
    Self Employment Taxes
    Severance Pay
    Sexual Harassment
    Sharing Economy Tax Implications
    Sick Leave Rules
    Small Business Administration
    Social Media
    Social Security
    Spendthrift Trust
    State And Local Taxes
    Student Loans
    Success
    Succession Plan
    Supplemental Wages
    Supply Chain Risks
    Tariffs
    Tax Brackets
    Tax Breaks
    Tax Changes
    Tax Credits
    Tax Debt Collection
    Tax Deductions
    Tax Forms
    Tax Implications
    Tax-Loss Harvesting
    Taxpayer First Act
    Tax Planning
    Tax Preparation
    Tax Reform
    Tax Refunds
    Tax Scams
    Tax Tips
    Trump's Tax Law
    Unemployment Tax
    W-2 Form
    W-4 Form
    W-4 Requests
    Wage Garnishments
    Wages And Overtime
    Wildfire Solution
    Wills And Trusts
    Withholding
    Work Opportunity Tax Credit
    Year End Tax Considerations

    RSS Feed

Proudly powered by Weebly