Tariff Policy

Overview

A tariff is a customs duty levied on imported and exported goods and services. Historically, countries used tariffs as a primary means of collecting revenue. Today, other taxes account for most government revenue in developed countries. Tariffs are now typically used to protect domestic industries or as leverage in trade negotiations and disputes.

The U.S. Constitution empowers Congress to set tariffs, a power that it has partially delegated to the President. The United States is also a member of the World Trade Organization (WTO) and a party to 14 free trade agreements (FTAs), which include specific tariff-related commitments. Congress and the President thus create U.S. tariff policy within the context of a rules-based global trading system.

The Trump Administration has been openly critical of low-tariff policies and has made greater use of its discretionary authority to increase tariffs on certain goods imported from key U.S. trading partners, with little Congressional input. Congress may want to decide whether such actions, taken under authority that it has delegated, reflect its priorities. Other issues of potential interest include whether to examine more closely the costs or benefits of changing U.S. tariff rates.

In 2018, PHTA provided information to its members on how this change in tariff policy and increase in tariffs may affect them, as well as providing tools and steps to achieve exclusions from tariffs.

• Tariffs Webinar (available in PDF and PowerPoint formats)