Informative Speech
Understanding Tariffs
Global Trade Policies and Your Finances
Jake Yi
Presentation Road Map
What We Will Cover Today
Part 01
What Tariffs Are & Why They Exist
• Definition: taxes on imported goods entering the U.S.
• How tariffs are levied and paid at the port of entry.
• Stated policy goals: boosting domestic production & trade bargaining.
• How tariffs are levied and paid at the port of entry.
• Stated policy goals: boosting domestic production & trade bargaining.
Focus: Clarifying who pays the initial tax
Part 02
The Supply Chain & Cost Absorption
• How tariffs hit domestic production (e.g., imported parts in U.S. cars).
• Business response: absorbing margins vs. negotiating vs. raising retail prices.
• The consumer share of the tariff burden.
• Business response: absorbing margins vs. negotiating vs. raising retail prices.
• The consumer share of the tariff burden.
Focus: Examining the 55% consumer cost split
Part 03
Real-World Price Impact & Takeaways
• Measured increases across retail categories (Fed & St. Louis Fed data).
• Evaluating economic trade-offs and forecast revisions.
• How to interpret trade news for personal consumer decisions.
• Evaluating economic trade-offs and forecast revisions.
• How to interpret trade news for personal consumer decisions.
Focus: Real data on everyday family expenses
Mechanics & Policy
How a Tariff Actually Works
Step-by-Step Example (50% Tariff on $5.00 Base Good)
Product Sent From Abroad
$5.00
Export price at origin
+
50% Import Duty
+$2.50
Paid by U.S. importer
=
New Landed Cost
$7.50
Before handling & retail markup
Key Policy Milestones
Implementation Timeline
Early 2025: Administration announces wide trade policy overhaul addressing foreign trade balances.
Feb 4, 2025: Initial 10% tariff enacted on Chinese imports, marking the first phase.
2025–2026: Expanded across categories and countries, creating a dynamic trade landscape.
Economic Objectives
Stated Strategic Goals
Federal Revenue: Tariffs generate customs duties deposited into the U.S. Treasury.
Encourage Domestic Output: Makes foreign goods costlier to stimulate local manufacturing.
Bargaining Leverage: Applied to counter perceived imbalances in bilateral trade agreements.
Supply Chain Interdependence
Why "American-Made" Still Feels the Impact
Case Study: U.S. Automotive Assembly
A vehicle assembled in Detroit doesn't mean 100% domestic components.
Cars assembled in American factories frequently depend on specialized imported steel, electronics, microchips, wiring harnesses, and raw materials. When tariffs raise import costs, American manufacturing bills rise immediately.
Pressure 01
Component Sourcing
Specialized intermediate goods are rarely produced domestically at comparable scale or cost, making substitution difficult.
Pressure 02
Operational Margins
Firms facing spiked input bills must choose between cutting internal expenses, delaying investments, trimming workforce, or lowering quality.
Pressure 03
Consumer Pass-Through
When cost pressures exceed what operating margins can absorb, producers ultimately pass the increases forward into final sticker prices.
Cost Distribution
Who Actually Shoulders the Burden?
Goldman Sachs Economic Analysis (Bloomberg, Oct 2025)
Consumers Bear ~55% of Tariff Costs
Core Finding:
Over half of the total financial cost created by tariffs is passed directly to retail consumers in final prices.
• 55% Passed to Consumers: Reflected in everyday retail price bumps across consumer goods.
• 45% Absorbed Internally: U.S. importing firms accepting thinner margins, plus foreign suppliers cutting prices to compete.
• Key Takeaway: While suppliers take a hit, everyday American households shoulder the majority of the tariff bill.
Federal Reserve & Economic Data
Measured Price Pressure by Sector
Household Impact Estimate
0.5% – 1.0%
Revised annual price impact (Yale Budget Lab)
Initially estimated at 2.3% (~$3,800/yr), post-implementation analysis in 2026 adjusted estimates to 0.5%–1.0%, showing how supply adjustments and exemptions temper initial projections.
Everyday Essentials Exposed
Tableware, personal care, and electronics bear steady marginal upticks rather than one abrupt spike.
Targeted vs. Broad Inflation
Directly tariffed Chinese goods saw an 8.5% YoY rise, proving tariff-specific price transmission.
Dynamic Adjustments
Businesses redirecting supply chains and shifting product origins gradually cushion severe spikes over time.
Conclusion & Takeaways
Tariffs: A Balance of Policy and Trade-Offs
Summary Point 01
Strategic Policy Tool
Tariffs raise federal customs revenue and incentivize domestic manufacturing over foreign imports, serving as strong leverage in trade negotiations.
Summary Point 02
Direct Consumer Cost
Because modern supply chains are thoroughly intertwined, roughly 55% of tariff costs are passed through directly into consumer retail prices and assembly costs.
Summary Point 03
Informed Choices
Recognizing which sectors face import cost inflation allows households to anticipate price shifts and make smarter budgeting decisions.
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By Jake Yi
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