How the Tariffs Will Likely Affect You – Professional Tax Services

A tariff is a government tax levied on imported goods. The purpose of the Trump administration’s tariffs is to revive manufacturing in the United States, as well as to slow or stop illegal immigration and fentanyl from entering our borders. These tariffs are paid to our government by importers.
When a product or part of a product arrives in the United States, the tariff becomes a portion of the price consumers pay before sales tax. Thus, if the tariffs remain in effect, we may experience sharp increases in prices, causing an economic decline, leading to a potential recession. Eliminating income tax is a potential solution.
It is difficult to predict the level of tariffs on many goods because some products contain multiple parts that may come from several countries. Thus, determining the level of tariff levied on numerous products we receive from abroad is complicated.
The problems with tariffs are that some products we are accustomed to purchasing may no longer be available because the tariffs will be too costly for some foreign manufacturers and suppliers to continue to export to us. The other issue is retaliatory measures taken by countries by implementing tariffs on US exports. Thus, the implementation of tariffs could rebound on US manufacturers.
Why Did Trump Implement Tariffs?
Many economists believe that the North America Trade Agreement (NAFTA), which went into effect in 1994, led to trade deficits, factory closures, and loss of jobs due to the lifting of tariffs between the US, Canada, and Mexico. Add to this, American manufacturing moving from the US to Asian countries, especially China, has caused our economy to no longer be a supplier economy to other nations, but to be a service economy dependent on imported goods. If Trump’s plan works, it will lead to a resurgence in American manufacturing and job growth.
Get with Your Tax and Financial Planner
Because both consumers and business owners will likely be financially affected, we recommend you receive assistance from your financial advisor and tax professional. We will continue to offer our clients unlimited tax planning and financial advice throughout the year.
Professional Tax Services is a locally owned provider serving over 3,800 local residents and businesses. For more information, call 661-259-1967 or visit www.scvprotaxservices.com.