An economist answers: 'What is a tariff?'

With a flurry of economic updates leading the news cycle, we wanted to answer the very basic question: "What is a tariff?"

"A tariff essentially is very much like a tax on a particular good," says Professor Erasmus Kersting, chair of the Villanova University economics department.

Kersting says these tariffs will lead to higher prices.

"Since these tariffs are extremely universal, on almost anything from another trading partner, consumers will feel it in any purchase," he says.

We can expect to see these tariffs or taxes on imports soon, Kersting said.

"Cars - I would expect to see these prices within weeks, maybe months, to be visible," said Kersting

The Trump Administration says these measures will support American manufacturing growth. But in the short term, it not only affects prices but the variety of goods available.

"What taxes and tariffs usually do, is make the market smaller. That usually limits trade and that is not a good thing. That means that we have less choice. We are not going to be able to buy the goods, the wine, the cars, the things we used to buy. Because they now cost more," said Kersting.

These announced tariffs may lead to international trade deals, but there have already been massive impacts on global markets.

"Clearly the damage is already being done. You look at the stock market on Thursday and now today, at the value that being wiped out with these kinds of announcements. It's quite astounding," said Kersting.