This is the Cato Daily Podcast for Wednesday, April 17th,

2024. I'm Caleb Brown.

Tariffs are trade restricting taxes.

But among the main misconceptions about tariffs, the question of who actually pays those

taxes seems to befuttle more than just the politicians who push them.

Erica York of the Tax Foundation has written a new essay on Terrace, part of Cato's

Defending Globalization Series.

We spoke yesterday.

From the most basic economic perspective, explain what a tariff is.

A tariff is a tax.

It's like an excise tax that applies to imports or goods that we purchase from foreign countries

and bring into our country.

And so a tariff is just a tax that's charged upon importation of a foreign good.

To hear politicians talk about tariffs, in particular Donald Trump.

When he talks about tariffs, he makes it sound like it is a tax that is imposed

on the foreign entity, the entity that is imposed on the foreign entity, the entity that is selling us the thing on which we have imposed

the tax. What does he not understand about that?

There could be a theoretical economic argument

that the burden of a tariff falls on the foreign exporter,

but that's typically not the argument that Trump or other politicians are making.

They are misconstruing the idea and saying that this is a tax that we're charging to foreign

companies to let them into our market and that's just simply not how

...