Since the conclusion of the election in late November, many questions have been raised about what President Donald Trump’s second term will look like. One of the most controversial ideas Trump brings to the White House is his international tariff agenda, which sees a tax put on goods imported from other countries to the United States. Ever since its announcement, this plan has been discussed heavily throughout the country. However, many are still unsure of what this plan holds and what it would mean for the country going forward.

Jim Ratliff has been teaching economics for years by helping students understand the complexities of the American economic system and how it operates. Tariffs are a huge part of the economy he teaches and have been ever since the birth of the nation.

“[Tariffs are] something that a government charges other countries and… companies from foreign countries so that they can import their goods into the United States,” said Ratliff. “[They] are typically used as a political negotiation tool. We want economic sanctions. All that means is we’re going to punish a country financially instead of the military route.”

Although tariffs themselves are far from new, the specific plan proposed by the incumbent president is somewhat unprecedented. The breakdown of the plan is a 60 percent price increase on goods imported from China and a 10 percent increase on goods from every other country.  These taxes are being put in place for two reasons: to increase foreign manufacturing in America and to try to decrease tariffs enforced on American goods by other countries.

“It encourages those foreign countries to avoid the tariff by owning production facilities for their products in the United States. So that means jobs for Americans, paychecks for Americans, and all those good things,” Ratliff said. “[It also says] if you would like us to lower the tariffs imposed on you, then you, in turn, should lower your tariffs imposed on the products that we ship to your country.”

Optimistically, these taxes should be able to get these two goals accomplished and strengthen the American industrial sector. It opens up opportunities for new jobs created through foreign companies opening factories here, and it increases exports through foreign countries decreasing taxes on American goods. However, there are cons.

“The big… con… [is] that [foreign countries, specifically China,] will then just simply raise the price of the product that they charge the American consumer. They’ll just pass the tariff on to the average American consumer, knowing that we import so much goods from China that we won’t be willing to just forgo those products because of the price increase, which we all know is inflation,” Ratliff said.

If these price increases go through, the long-term effect could be more expensive products for the American consumer. As Ratliff explained, since American manufacturing can not produce goods in bulk like countries, such as China, can, therefore the impacts of this tax will be nearly unavoidable on the average American’s wallet. And if countries refuse to negotiate with the US, the long-term effect could be severe.

“President Trump’s administration will understand that drawing on there could be tremendous benefits, but there could also be a world that exists for that worst-case scenario, and no one negotiates it, that could happen, and all those bad things are theoretically possible, where inflation would inevitably skyrocket, because the cost of every day goods for everyday American citizens, could become exponentially [more expensive] because of the strategies that we have taken. That is a worst-case scenario,” Ratliff said.

As of right now, it is unclear when exactly the president will push these taxes across the board. However, since taking office Trump has continued to emphasize the tariffs as an important bargaining chip during his term. On February first, the president announced an implementation 25 percent tariff on Canada and Mexico and an additional 10 percent tariff on China. The White House expects retaliatory tariffs in response from these countries, and have stated they expect a short-term price jump for the American consumer. These taxes in Mexico and Canada have since been delayed 30 days after negotiations with leaders from both countries.