President Trump has gone back-and-forth on tariffs since taking office in January. Ryan Monarch, assistant professor of economics, explains the complexities of tariffs and their implications on the economy. 

“A tariff is a tax on an imported good paid by an importer in order to obtain their purchase after passing through customs. The basic purpose of a tariff is to increase the price of imported goods from a particular country in order to protect domestic producers of that good,” Monarch tells The Motley Fool.

“Since tariffs increase the price of imported goods, tariffs impact the economy in a number of ways. First, average import prices increase as the scope of imported products facing tariffs expands. Second, tariffs tend to lead the imports of the affected goods to decrease,” says Monarch.

On the Develop This podcast, Monarch explains how tariffs can affect supply chains, consumer choices, and the overall market dynamics while also addressing the political motivations behind tariff implementation.