Tariffs Explained: What They Mean for Everyday People in the US and Australia

If you’ve been following the news lately, you’ll know tariffs have been making headlines again. Ever since Donald Trump won the recent presidential election in the US, tariffs have become one of the biggest talking points in the media. They were a central campaign promise, and now they’re back in play.

I’ve been fascinated by how much attention tariffs get in global discussions. The media coverage has been intense, full of scaremongering and sensationalism—no surprise there. But what’s often missing is a calm, economic explanation of what tariffs actually are and what they mean for everyday people like you and me.

I’m not here to get into whether tariffs are good or bad politically. From a purely economic perspective, tariffs don’t usually stack up as sound long-term policy. That said, with Trump’s political style, the move fits perfectly into his broader theme of appealing to people’s emotional responses: the idea of “protecting American jobs” resonates with a lot of voters, even if the economics are a bit shaky.

So let’s break this down in simple terms:

1. What are tariffs, anyway?

2. What are they meant to achieve?

3. And most importantly, how will they actually impact everyday people in the US and countries like Australia that find themselves on the receiving end?

What Are Tariffs, Anyway?

At their core, tariffs are just taxes. More specifically, they’re taxes placed on goods imported from another country. Governments collect these taxes at the border, which means any product coming into the country automatically becomes more expensive.

Tariffs aren’t new. They’ve been around for centuries, often used by governments as a way to protect local industries. Back in the 19th and early 20th century, tariffs were a huge part of global trade policy. But as the world became more connected through globalisation, most countries—including the US—gradually reduced tariffs to encourage free trade.

So, what’s happening right now? Under Trump’s proposed scheme, imports into the US would face new taxes. For example:

• Everyday goods imported from Australia could be hit with a 10% tariff.

• Key industries, like steel and aluminium, could face much higher tariffs—sometimes 25% or more.

That’s a significant increase, and it changes the way both businesses and consumers think about what they buy and sell.

What Is a Tariff Meant to Achieve?

If tariffs sound a bit old-school, that’s because they are. But why would Trump want to bring them back in 2025?

The main reason is simple: to protect American jobs and industries. Countries like China, Vietnam, and even Australia have what economists call a “comparative advantage.” They can produce certain goods much cheaper than the US, usually because of lower wages or an abundance of resources. For example, Australia produces high-quality steel and aluminium at a competitive price thanks to our mining industry.

This creates a problem for US manufacturers. If they can’t compete on cost, their products struggle to sell. Tariffs are Trump’s way of levelling the playing field. By slapping a tax on imports, foreign goods suddenly become more expensive. In theory, this makes US-made products more attractive to both businesses and consumers.

The idea is that companies will start producing more domestically, creating jobs for American workers. Politically, that’s a powerful message. Economically, however, it’s not quite so straightforward.

What Will Be the Impact on Everyday People?

Here’s where it gets interesting. Tariffs don’t just exist in theory—they affect real people. Let’s look at how they play out for both Americans and Australians.

In the US

For the average American, tariffs mean higher prices. If a 10% tariff is placed on imported everyday goods, retailers don’t just absorb that cost—they pass it on to the consumer.

Imagine you’re shopping at Walmart for household items or groceries that are imported. Suddenly, everything costs a little more. The same goes for cars, electronics, and even clothing. In other words, tariffs act like a hidden tax on consumers.

There’s also the knock-on effect. If businesses have to pay more for materials like steel and aluminium, they’ll raise their prices too. That means cars, appliances, and even construction projects could become more expensive.

Supporters of tariffs argue that this pain is worth it because it encourages more domestic production. But in reality, building up local industries takes time, and in the meantime, ordinary people bear the brunt of the extra costs.

In Australia

So what about us here in Australia? If Trump slaps tariffs on Australian goods, our exporters lose out. Industries like steel and aluminium would be less competitive in the US market, which could lead to reduced sales and, potentially, job losses at home.

For example, if Australian aluminium suddenly costs 25% more in the US, American buyers might look elsewhere—or switch to domestic suppliers. That means less demand for Australian exports, which can ripple through our economy.

Everyday Australians could also feel the effects indirectly. If our economy slows because of reduced exports, it can put downward pressure on wages and job opportunities. The Australian dollar might also weaken, which makes imported goods here more expensive.

In short: while Americans pay more at the checkout, Australians could lose out on trade opportunities and economic growth.

The Bigger Picture

Tariffs often sound like a quick fix, but they’re rarely that simple. Economists generally agree that free trade creates more benefits overall by letting each country focus on what it does best. Tariffs interfere with that system and usually end up making goods more expensive across the board.

The other big issue is retaliation. When one country introduces tariffs, others often respond in kind. If the US slaps a tariff on Australian goods, Australia might respond with tariffs on American exports. This can escalate into a trade war, which benefits no one. Interestingly , based on recent commentary coming from the Australian Government they have announced that they are not planning a retaliatory tariff on the US. However , other countries such as China for example have made it clear they will introduce retaliatory tariffs on US goods entering China.

History gives us a warning here. In the 1930s, the US introduced the Smoot-Hawley Tariff, raising import duties on thousands of goods. Other countries retaliated, global trade collapsed, and the Great Depression worsened. It’s a reminder that tariffs can have unintended consequences far beyond what politicians promise.

Bringing It Home

So, what does all of this mean for someone like me, sitting here in Brisbane?

For starters, it shows just how interconnected the world economy is. A decision made in Washington can affect industries and jobs here in Queensland. If tariffs reduce demand for Australian exports, our mining and manufacturing sectors could feel the squeeze.

On a personal level, it might mean higher prices on imported goods if the ripple effect pushes up costs globally. Even if you’re not directly involved in trade, tariffs can filter through to your everyday life—whether it’s the price of a new laptop, the cost of renovating your home, or the job opportunities available in certain industries.

Final Thoughts

Tariffs are one of those economic policies that sound simple but have far-reaching consequences. Trump’s plan to reintroduce them might score political points, but for everyday people, the impacts are mixed at best.

• For Americans: expect higher prices on everyday goods.

• For Australians: expect challenges in export industries and potential knock-on effects on jobs and the economy.

In the end, tariffs are less about good economics and more about politics. They tap into emotional themes of national pride and job protection, even if the long-term results are less rosy.

I find it fascinating to see how global politics can ripple right through to our local economy. It’s a reminder that in today’s world, no country is an island—and what happens in Washington can matter just as much here as it does in New York or Los Angeles.