Tariffs, explained: How they work and why they matter. Tariffs are taxes imposed on imported goods by governments or supranational unions, sometimes on exports too, to generate revenue and regulate trade, shielding domestic industries. There are four main types of tariffs: Ad valorem tariffs, calculated as a percentage of the good’s value; specific tariffs, fixed fees based on quantity; compound tariffs, combining specific and ad valorem duties; and mixed tariffs, applying either specific or ad valorem duties based on conditions. The objective is to influence international trade, protect domestic industries, and counter unfair practices. The US Trump administration employs reciprocal tariffs to influence other countries’ trade policies, imposing duties in response to foreign tariffs or barriers. Tariffs are collected at ports of entry by customs departments. The Trump administration’s reciprocal tariff policy aims to address trade imbalances and protect domestic industries, reshaping US trade relations and diverging from multilateral trade policies. The US-China tariff war, initiated in 2018, disrupted global supply chains, leading to inflation and geopolitical shifts. Governments’ tariff policies affect global markets, supply chains, manufacturing hubs, and prices worldwide. Trump’s tariff exemptions for tech products provided sector relief, impacting Bitcoin prices. Tariff policy criticism includes concerns over executive power, recession risks, legal challenges, and implications for small businesses and consumers. The impact of tariffs extends beyond national borders, shaping economic strategies and global influence in an interconnected world, making them a critical element of trade policy.