President Trump is threatening to levy section 301 tariffs on China to raise the costs of goods. But first, let’s define a tariff. According to Miriam Webster a tariff is defined as:

1a: a schedule of duties imposed by a government on imported or in some countries exported goods

b: a duty or rate of duty imposed in such a schedule

2: a schedule of rates or charges of a business or a public utility

3: PRICE, CHARGE

Recent Examples on the Web: Noun

The talks come against a bleak backdrop of slowing global growth and Trump’s America-first trade policies, which have led to a bitter tariff war with China on top of the tensions with Europe.— Alex Turnbull, BostonGlobe.com, “US objections to French tech tax overshadow G-7 finance meeting,” 17 July 2019The Fed’s Beige Book described the US economy as modestly expanding, but also talked of widespread concerns about the impact of tariffs.— Anneken Tappe, CNN, “S&P 500 has its worst day in more than three weeks,” 17 July 2019

Now let’s clarify section 301, as explained by Wikipedia https://en.wikipedia.org/wiki/Section_301_of_the_Trade_Act_of_1974

Section 301 of the U.S. Trade Act of 1974 (last edition March 23, 2018^[1]), (Pub.L. 93–618, 19 U.S.C. § 2411) authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce. Section 301 cases can be self-initiated by the United States Trade Representative(USTR) or as the result of a petition filed by a firm or industry group.

So basically, if a product is less expensive to make in China, but the section 301 tariffs are levied and have increased the cost of Chinese goods (up to 25% in some cases) in the United States, it financially encourages companies to purchase American Made products. Right now President Trump is threatening to raise the tariffs even more.

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