Could Trump’s Tariffs Lead to Higher Prices? Here’s What to Know.

President-elect Donald J. Trump has professed a belief in the power of tariffs for decades. Now, as he prepares to take office, they are a central part of his economic plan.

Mr. Trump argues that steep tariffs on foreign goods will help benefit U.S. manufacturing and create jobs. His proposals would raise tariffs to a level not seen in generations. Many economists have warned of potentially harmful consequences from such a move, including higher costs for American households and businesses, and globally destabilizing trade wars.

Here are five crucial things to know about Mr. Trump’s sweeping trade plans.

Mr. Trump has floated several hefty tariff plans.

While campaigning for the White House, Mr. Trump offered up a running list of tariffs. He talked about a “universal” tariff of 10 to 20 percent on most foreign products. He has proposed tariffs of 60 percent or more on Chinese goods. And he has suggested removing permanent normal trading relations with China, which would result in an immediate increase in tariffs on Chinese imports.

Mr. Trump has also promoted the idea of a “reciprocal” tariff, in which the United States would match the tariff rates that other countries put on American goods. He has suggested using tariff revenue to replace income taxes. And he has threatened tariffs of 100, 200 or even 1,000 percent on Mexico, saying the country should do more to stop flows of migrants and shipments of Chinese cars.

The Biden administration has also raised tariffs on goods from China, but Mr. Trump’s plans are much larger — affecting trillions of dollars of products, rather than tens of billions.

Mr. Trump says foreign companies pay the tariffs. That’s usually wrong.

A tariff is a tax that is put on a product when it crosses a border. For instance, a company that brings its product into the United States — the importer — actually pays the tariff to the U.S. government.