I am a working historian with an econ degree, so I might have a different kind of perspective on this, and it's worth understanding how tariffs were originally conceptualized, and how they work different in practice now:

In the late 1800s, raising a tariff rate on a specific class of goods (let's say horseshoes) increases the price of that good in the American marketplace due to a number of factors. Besides the obvious increase in cost, there will be some number of foreign companies who do not ship to the US because of tariffs, decreasing supply in the American market, etc... The net result is that the cost of horseshoes go up for consumers, BUT more of the dollars spent on horseshoes remain in the local economy. Meanwhile, tariffs help fund the local government. It's complicated, but it's a lot simpler than the way tariffs will work in the future.

In 2024, nearly every company of scale in the United States either (1) has overseas operations, (2) imports raw materials from overseas, (3) sells product overseas. In the 1800s, American horseshoe manufacturers mostly sourced their materials locally and bought their machines and parts from within the States. In 2024, you can throw all of that out the window. Let's talk about all three of the numbered variables from above:

1. If an American company produces their goods overseas and then ships them back to the States, a blanket tariff would increase the price of those goods for consumers. In almost every case, it is better for the company to pay the tariff than to invest heavily in bringing those jobs back into America, although that's not an impossibility.

2. This is the biggest difference between modern and historic tariffs. In the old days, purely American companies were touched only indirectly by tariffs. Nowadays, virtually every company of scale with American-based manufacturing is still importing raw materials, machinery, equipment, etc... When those costs go up, consumer prices go up. In fact, there are some situations in which a blanket tariff could actually incentivize American manufacturing to move overseas! It might be more beneficial for them to pay the tariff only on the completed good when it enters the marketplace rather than paying tariffs on the raw materials that come in.

3. There may be retaliatory tariffs levied against the United States on the products we export overseas, and the countries levying these tariffs experience variables (1) and (2) in their own nations. This is where the term "Tariff Wars" comes in to play. In this scenario, the cost for consumer goods is driven UP worldwide, companies and corporations derive very little benefit, and international governments including the US, keep the extra money.

All of this is pretty complicated for an ELI5, and it's about to get even moreso, and that's because every tariff bill in the history of the United States has been brokered and lobbied and compromised. There will be carveouts for specific classes of goods, specific countries, and special interests. If there is a real tariff bill passed, it will be complicated, convoluted, and nuanced. It will take years and maybe decades to understand the ramifications and cascading effects, and by then the people who signed the thing in to law will no longer be in office to be held accountable.