PORTLAND, Maine — President Trump announced this month the U.S. tacked on a new 10% tariff on billions of dollars worth of Chinese made goods. He later delayed some of the tariffs until Dec. 15.
Tariffs are not a new concept, but the escalating trade war with China sparked the question where do the customs duties go?
Short answer, like all taxes, it goes to the U.S. Treasury. In a report released Aug. 12, the fiscal year-to-date data lists $59 billion pulled in by U.S. Customs and Border Protection.
What is a tariff?
An industrial tariff taxes non-agricultural merchandise imports, such as lawnmowers, cars, shoes, IT and wood products, and fish and fish products.
For a full list of goods affected, click here.
Those products come over, in this case from China, to a U.S. port of entry. The American importer pays the tariff. Typically, the importer absorbs the cost of a product narrowing the profit margins so the cost doesn’t get passed onto the consumer. Occasionally the exporter lowers the original price so the importer continues to buy.
The new tariffs between Sept. 1 and mid-December will impact the average American household by $1,000 per year, according to new analysis from J.P. Morgan.
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