{"id":1130,"date":"2025-04-12T06:41:05","date_gmt":"2025-04-12T06:41:05","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/what-to-know-about-who-pays-the-higher-costs-of-trumps-tariffs\/"},"modified":"2025-04-12T06:41:05","modified_gmt":"2025-04-12T06:41:05","slug":"what-to-know-about-who-pays-the-higher-costs-of-trumps-tariffs","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/what-to-know-about-who-pays-the-higher-costs-of-trumps-tariffs\/","title":{"rendered":"What to Know About Who Pays the Higher Costs of Trump\u2019s Tariffs"},"content":{"rendered":"<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">President Trump\u2019s latest tariffs are about to become an unavoidable and expensive reality for American businesses and for people who rely on foreign goods.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Shoppers buying clothes from retailers in China may soon pay more than twice as much, now that a special exemption for lower-value imports is disappearing. And companies involved in international trade must now make even more complicated calculations to decide how much they owe in tariffs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cMaybe 3 percent of the people are well prepared,\u201d said Jeremy Page, a founding partner of Page Fura, an international trade law firm, whose clients include large companies. \u201cAnd that might even be charitable.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Imports from China have been hit with tariffs of 145 percent. That means for every $100 worth of goods a business buys from that country, it has to pay $145 to the federal government. Goods from most other countries have a new 10 percent tax, though that could rise if the countries do not reach trade agreements with the United States by July. And there are separate tariffs on cars, steel and aluminum. Mr. Trump has also said he wants to impose new tariffs on pharmaceuticals and computer chips.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump contends that the tariffs will encourage businesses to produce goods in the United States. The tariffs on Chinese goods will almost certainly reduce imports from the country. But American businesses will not be able to quickly get goods from elsewhere \u2014 U.S. imports from China totaled $439 billion last year \u2014 and they will end up owing huge amounts in tariffs.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<h2 class=\"css-13o6u42 eoo0vm40\" id=\"link-22fdedf0\">Who pays the tariffs?<\/h2>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump has said tariffs are a tax on other countries, but, overwhelmingly, American businesses importing the goods pay the tariffs to the Customs and Border Protection when goods enter the United States. Importers may pass some or all of the cost of the tariff to consumers through higher prices.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cIn the short term, prices are definitely going to increase,\u201d said Daniel J. Barabino, chief operating officer at Top Banana, a fruit distributor based at the Hunts Point Produce Market in the Bronx, which imports bananas and other produce from Central America.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Importers may also try to negotiate lower prices with foreign suppliers, which would reduce the tariff.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<h2 class=\"css-13o6u42 eoo0vm40\" id=\"link-43ffdb8a\">How are the tariffs paid?<\/h2>\n<p class=\"css-at9mc1 evys1bk0\">Most importers employ customs brokers who calculate the tariffs owed based on the goods\u2019 value and where they were exported from. Other factors \u2014 like whether a product has components from China \u2014 can complicate the tariff calculation.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Payments are made electronically, from the bank accounts of either importers or the brokers, who later recoup the money from their clients. As Mr. Trump has piled on tariffs, some brokers are becoming more cautious and demanding customers pay up quickly.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWith changing tariffs and increased risk, many brokers are tightening their credit policies \u2014 asking for upfront payments or requiring funds to be held on account,\u201d said Adam Lewis, a co-founder and president of Clearit, a customs broker.<\/p>\n<h2 class=\"css-13o6u42 eoo0vm40\" id=\"link-58ad5740\">Where does the money go?<\/h2>\n<p class=\"css-at9mc1 evys1bk0\">The tariffs end up at the Treasury Department, which also receives taxes and other government fees, and spends the money on things like salaries, weapons and equipment.<\/p>\n<h2 class=\"css-13o6u42 eoo0vm40\" id=\"link-e2d53d4\">What happens if a business pays less than it owes?<\/h2>\n<p class=\"css-at9mc1 evys1bk0\">Calculating tariffs can be difficult, especially when tariff rates change a lot in a matter of days, as they have recently.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-4\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Trade rules allow for some leeway, said Mr. Page, the lawyer. Importers who realize they have made a mistake and inform Customs and Border Protection are usually allowed to pay what they owe, plus interest.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But, Mr. Page said, Mr. Trump\u2019s recent executive orders on metals tariffs were stricter than that. The order said Customs and Border Protection could impose much higher monetary penalties if importers misclassified goods, an approach that, in Mr. Page\u2019s view, defies the law.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThat mandate says, \u2018We\u2019re going to hammer you no matter what,\u2019\u201d he said.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-5\">\n<div class=\"css-53u6y8\">\n<h2 class=\"css-13o6u42 eoo0vm40\" id=\"link-696d7442\">Will the new tariffs cause delays?<\/h2>\n<p class=\"css-at9mc1 evys1bk0\">Customs and Border Protection\u2019s systems are already showing signs of strain.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">On Friday, the agency said importers had not been able to submit tariffs owed on certain goods. The glitch appeared to be preventing importers from applying a lower tariff rate on goods that were in transit to the United States before some of Mr. Trump\u2019s new levies took effect.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Customs and Border Protection said it was releasing the goods affected by this problem and allowing importers to submit their customs duties later.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-6\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Late Friday, a spokeswoman for the agency said: \u201cThere was a brief technical issue that was quickly identified and resolved. It had no impact on cargo flow, and all applicable tariffs were collected during that time.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThis won\u2019t be the last time that something like this happens,\u201d Mr. Lewis said, adding that there may be backlogs when customs officials do more checks to see if the tariffs on Chinese goods are being paid correctly.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Countries that don\u2019t strike trade deals with the United States by July may face higher tariffs, and Mr. Trump may suddenly decide to introduce new tariffs. Fears of such levies could extend a monthslong rush to get goods into the United States before the new tariffs take effect.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Supply chains have so far handled the higher volumes without major snags.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Trucking activity around Laredo, Texas, one of the busiest border crossings in the United States, was 46 percent higher than it was a year earlier, according to Motive, which gets its data from the tracking devices it provides to trucking companies. Local truckers said their networks had not been strained.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">At the Port of Long Beach and Port of Los Angeles, trucks took 71 minutes on average to pick up cargo from terminals in the first three months of this year, according to data from the Harbor Trucking Association, a trade group. That was slightly up from 68 minutes in the first three months of last year. In the first quarter of 2022, when the pandemic trade boom caused backlogs at the ports, pickups took an hour and a half.<\/p>\n<p class=\"css-798hid etfikam0\">Danielle Kaye<!-- --> contributed reporting.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n","protected":false},"excerpt":{"rendered":"<p>President Trump\u2019s latest tariffs are about to become an unavoidable and expensive reality for American businesses and for people who rely on foreign goods. Shoppers buying clothes from retailers in China may soon pay more than twice as much, now that a special exemption for lower-value imports is disappearing. And companies involved in international trade [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1131,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[281,819,818,199,197],"class_list":["post-1130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-costs","tag-higher","tag-pays","tag-tariffs","tag-trumps"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=1130"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1130\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/1131"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=1130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=1130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=1130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}