MINNEAPOLIS (WCCO) — President Donald Trump said he wants to work towards eliminating tariffs with Europe after he met with European officials on Wednesday. This comes after the U.S. announced new tariffs on steel and aluminum imports earlier this year.
Over the past few weeks, many WCCO viewers have email Good Question about tariffs. So, WCCO brought those questions to University of Minnesota international trade expert Robert Kudrle.READ MORE: Study Ranks Minnesota As 6th Safest State During Pandemic
Amber from Brooklyn Park asked: What is a tariff?
A tariff is essentially a tax on imports.
For example, if an American company buys a $100 umbrella from Sweden, it will have to pay $115 for that umbrella to come into the country.
That assumes there’s a 15 percent tariff on umbrellas coming to the U.S.
Aaron from Fridley asked: Who collects the money?
U.S. Customs and Border Protection is in charge of collection at the 328 American ports of entry.READ MORE: Appeals Court: Judge Erred In Not Reinstating 3rd-Degree Murder Charge Against Derek Chauvin
Before the product comes into the U.S., agents handle the paperwork that shows the tariff has been paid.
Ken, Nancy, Peter, Terry, Ray and Mike asked: Where does the tariff money go?
It goes into the general fund of the U.S. Treasury. In 2017, the U.S. collected $34.6 billion in tariffs.
In 2018, it expects to collect $40.4 billion. That’s about 1 percent of total U.S. revenue.
According to the Pew Research Center, 30-percent of American imports are subject to tariffs.
For petroleum, the average is 0.2 percent. For clothes, the average is 19 percent.MORE NEWS: HealthPartners Now Offering Drive-Up COVID-19 Vaccinations
Right now, the U.S. still has some of the lowest tariff rates in the world.