ELI5: What are tariffs and how do they work in economics?

Imagine you love building with Lego. Your friend, let's call them Sarah, lives in another town and also loves Lego. You both want to trade Lego sets.

A tariff is like a tax that Sarah's town makes you pay when you bring your Lego sets into their town. It's a fee for bringing goods (Lego sets) from one place to another.

Here's how it works:

• Let's say you have a super cool Lego spaceship set. You want to sell it to Sarah for $20.
• Sarah's town has a tariff of $5 on all Lego sets coming from your town.
• So, when you bring your spaceship Lego to Sarah's town, you have to pay $5 to the town.
• Now, Sarah has to pay $20 (for the Lego) + $5 (for the tariff) = $25 total.

• To make Lego sets made in their town cheaper. If Sarah's town also makes Lego sets, the $5 tariff makes your Lego more expensive, and the Lego made in her town looks like a better deal.
• To make money for the town. The town gets to keep the $5 tariff you paid.

• Sometimes good, sometimes bad.
• Good for Sarah's town Lego makers because they might sell more. Good for Sarah's town's government because they get more money.
• Bad for you because it makes it harder to sell your Lego. Bad for Sarah because she has to pay more for your Lego.