Where is Trump’s tariff strategy going?

On Thursday, the president asked the Commerce Department and the U.S. trade representative to deliver reports on reciprocal steps to be taken.

A few days earlier, Trump placed 25% tariffs on all imported steel and aluminum, a move that affects Canada, Brazil and Mexico especially. Those tariffs are slated to go into effect in early March.

Other tariffs that could be on the horizon include 25% across-the-board tariffs for Canada and Mexico. Trump has delayed those duties for now, opting instead to negotiate with those countries’ leaders for three more weeks.

For China, tariffs are already in place: Trump implemented an additional 10% on all imports from China last week. Many of these goods were already subject to China tariffs Trump implemented during his first term as president.

Here is how Trump’s tariffs will impact the U.S. and where he might take this strategy next.

President Trump signs an executive order on reciprocal tariffs on Thursday.

What are U.S. tariffs and who pays them?

The tariffs that Trump has implemented are duties on U.S. imports, ranging from Chinese smartphones to Canadian steel.

American businesses and other firms importing the goods will pay for the tariffs, although who bears the ultimate burden is complicated. Importers can pass along tariff costs by raising prices for American consumers and businesses, for example. But foreign manufacturers might also be forced to shoulder costs to keep selling to the U.S. at a competitive rate; they could even go out of business if U.S. firms shift their buying to other countries to avoid tariffs.

Why is Trump using tariffs?

Trump says tariffs will help protect American businesses, move manufacturing to the U.S. and create jobs for American workers. He has also argued that tariffs would help narrow the U.S. trade deficit—or the gap between how much the country imports versus exports.

Most of the tariffs that Trump has implemented so far target China, which he believes engages in unfair trade practices. During his first term, his administration placed tariffs on Chinese products with the goal of curbing Chinese intellectual property theft, forced technology transfer and currency manipulation.

Many economists have been critical of Trump’s use of tariffs, warning that they are too blunt a tool for protecting the U.S. economy and addressing trade imbalances. They also argue that tariffs could do more harm than good by raising prices of goods for American consumers and businesses.

Shipping containers being transported at the Houston Port of Authority.

Outside of trade and the economy, there are additional reasons for Trump to use tariffs. Such a strategy has resonated with Trump’s political base, including working-class communities who were hard-hit by the decline of American manufacturing. Many Americans believe tariffs are a way to put “America First."

Threatening or using tariffs has also been a negotiating tool for Trump to extract other concessions that are important to him. For example, Trump delayed across-the-board tariffs on Canada and Mexico after the countries agreed to step up their border-control efforts. The president has promised to curb illegal drug trading and immigration to the U.S., placing the onus on bordering nations.

Whom do the reciprocal tariffs affect?

Equalizing tariff rates with other nations would mean that a number of developing countries could be hit with higher tariffs, particularly India, Brazil, Vietnam, Argentina and many other Southeast Asian and African nations. Those nations have placed some of the highest tariff rates on U.S. goods, like agricultural commodities and automobiles.

But reciprocal orders could hit lower-tariff nations and developed economies as well, such as Japan and members of the European Union. It could also mean even more tariffs for China, which currently has a lower average tariff rate than the U.S.

That’s because the Trump administration plans to take into account non-trade barriers, such as value-added taxes on American companies, government subsidies for companies in their home countries or regulations that prevent U.S. companies from doing business in foreign countries.

How might tariffs impact American consumers and businesses?

Economists say tariffs are likely to lead to higher prices for American consumers who rely on imports of everything from electronics to clothing and food.

For American businesses, the effect of tariffs will likely be mixed. Tariffs can spur domestic manufacturing as foreign goods become more expensive. At the same time, American manufacturers like carmakers that rely on importing parts to make their products will face higher input costs, which could squeeze profit margins and lead to job cuts.

Tariffs can trigger other nations to retaliate against the U.S., including with their own tariffs. In response to Trump’s additional 10% on Chinese goods for example, Beijing has already imposed 15% tariffs on U.S. coal and liquefied natural gas imports. It also raised levies on crude oil, agricultural machinery and certain vehicles.

How far will Trump take his tariff strategy and who might get hit next?

Trump appears likely to take his tariff strategy further than he did during his first term, although he remains highly unpredictable. On the campaign trail, he discussed raising duties on all Chinese goods to at least 60%, and a 10% universal tariff for all goods from any country. Trump has the option to escalate his trade fight with China, although his move on reciprocal trade could make universal tariffs less likely.

Commerce Secretary nominee Howard Lutnick said the studies on reciprocal tariffs that Trump ordered on Thursday should be completed by April 1. The Office of Management and Budget will also prepare a report within 180 days on the fiscal impact of the tariff increases, but officials said the duties won’t have to wait for that report to be completed.

The 30-day tariff reprieve that Trump agreed with Canada and Mexico expires in early March.

Write to Chao Deng at chao.deng@wsj.com