What are tariffs and how do they work?

Tariffs are taxes on goods traded between nations. They’re a way for countries to control international trade by artificially raising the cost of importing goods. Some tariffs can incentivize would-be importers to purchase from domestic sellers instead, potentially strengthening the local economy. The US adjusts tariffs based on trade agreements, political goals, and economic needs.

The US collected $77 billion in tariffs in 2024, making up 1.6% of federal revenue. Tariffs haven’t comprised more than 2.0% of total annual revenue since the 1960s.  Congress holds constitutional authority over tariffs but has delegated much of it to the president through legislation. Customs and Border Protection enforces tariff collections based on the type of goods, quantity, and country they come from.  As of October 2024, the average tariff rate for bringing goods into the US is 3.4%. However, it varies based on the product, cost, quantity, and relationship with the exporting country.  The US follows World Trade Organization rules that standardize tariffs across member nations, but 14 free trade agreements and special exceptions allow for lower rates with specific partners.  When the US raises tariffs, US companies importing international goods pay those tariffs. This can indirectly raise prices for American consumers.

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How much foreign aid does the US provide?

Why does the United States provide foreign aid? In short, to support economic development, global security, and humanitarian efforts. The United States Agency for International Development (USAID) and the State Department oversee the more than 20 agencies that fund these efforts. Foreign aid priorities shift over time, reflecting changes in America’s strategic interests. Here are the facts on USAID, how much foreign aid the US provides, and who gets it.   USAID is an independent agency that administers foreign aid and economic development assistance outside the US. In fiscal year 2024, the agency spent $21.7 billion, which was 0.3% of federal spending.    The US promised about $68.2 billion in foreign aid in FY 2022. Eighty-eight percent of aid was economic, while 12% was military aid, supporting internal security, self-defense, and UN-related peacekeeping.

When combining foreign aid from fiscal years 2001 to 2023, Afghanistan received the most from the US ($145.9 billion), followed by Israel ($91.2 billion) and Iraq ($89.4 billion).   Of the 196 countries recognized by the State Department, 173 received aid from the US in FY 2023. The median aid package was $43.7 million, but amounts ranged from $1,800 (yes, you read that right) to the $16.6 billion sent to Ukraine. Israel ($3.3 billion) and Ethiopia ($1.8 billion) rounded out the top three, collectively accounting for 30% of US aid that year.  Foreign aid data collection lags and numbers can take up to two years to be fully reported. Aid figures can change after they’re reported due to revisions for a more accurate record.

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According to the Agriculture Department, a second strain of bird flu has now infected cows. See the data on bird flu, including how it affects livestock and the price of eggs.     Did you read last week’s newsletter? Then you should be able to breeze through the weekly fact quiz.

One last fact

Between 2000 and 2021, the nation’s cancer incidence rate per 100,000 people fell by 5.7%, while the mortality rate dropped by 27.5%. In 2021, age-adjusted figures show 458.3 new cancer cases and 144.2 deaths per 100,000 people.