The entire aim of having trade is so that we can go buy those lovely things made by foreigners. We only export so as to be able to swap something for those foreign made goods. Thus tariffs are a bad idea to begin with — why should we tax ourselves for gaining access to the very point of our having trade in the first place? Sadly all too many don’t grasp this point. Too many of them being in the current Trump Administration.
Over and above the general point that we don’t want to limit trade nor imports there’s another worry with tariffs and trade wars. Which is what the International Monetary Fund is complaining about. The imposition of more tariffs is a disruption to that global economy. One that is going to reduce growth, the very thing we all desire.
Tim Worstall, “IMF Says The U.S. And China Trade Tariffs Are A Major Risk To World Growth”, Seeking Alpha, 2019-06-07.
July 9, 2019
QotD: Tariffs
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In a libertarian world, free trade would benefit everyone. Unfortunately, we live in the real world. Sure, tariffs are essentially biting off your nose to spite your face, but we do actually need them. We need them for the same reason that any generous welfare state requires strong border enforcement- free riders. Any restrictions that we enforce against home-grown industry, whether it be minimum wage laws, environmental regulations, or even child labor laws impose a cost. These costs are born by our own employers only, and are a competitive disadvantage to the rest of the world. If the goal of economic management is the fostering of local industry and services and the gainful employment of citizens, then a small amount of consumer discomfort is not out of line. If the purpose of government is the lowest possible prices at Walmart, then we should all just lie back and enjoy it.
Comment by hamilcar — July 9, 2019 @ 19:33