What you need to know about Trump's new tariffs

President Trump implemented a 10% baseline tax on imports from all countries, with higher rates for nations running trade surpluses with the U.S. This action seeks to reduce the trade gap caused by tariffs on U.S. goods by other nations. Economists warn these tariffs may lead to increased costs for consumers. Tariffs generate around $80 billion in revenue annually, which Congress allocates for government expenses. The Trump administration intends to use the additional tariff revenue to extend existing tax cuts, projected to decrease federal revenue by $4.5 trillion from 2025 to 2034. Price increases for consumers may start within months, particularly for products like produce from Mexico. Although some importers might absorb tariff costs, many businesses are likely to raise prices overall. Historically, Congress holds tariff powers, but recent authorities have shifted to the president, citing emergency powers from a 1977 law. Proposed legislation aims to limit this power. U.S. tariffs average 2.2%, which is lower than those in the European Union, China, and India, reflecting global trade negotiations over the past four decades.

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