What is a tariff? A guide to the hit on Canada if Trump pulls the trigger – National [Video]

United States President Donald Trump’s tariff threats are not going away.

Before and after assuming office in his second term, Trump has threatened to levy blanket tariffs of 25 per cent on all goods entering the U.S. from Canada and Mexico, in addition to targeting Chinese exports.

He’s given a variety of reasons to justify trade volleys against other nations, from claiming they will fund massive tax cuts in the U.S. to toughening up North American borders.

But what exactly are tariffs, the trade tool that Trump has called “the most beautiful word … in the dictionary”?

Here’s what you need to know about how tariffs work, how they affect economies and why governments use them.

A tariff is a tax put on goods or services coming from another country.

For example, the U.S. has previously imposed taxes on Canadian softwood lumber, steel and aluminum, which could be materials used by an American furniture maker …