I have a simple question for all defenders of tariffs. If tariffs benefit the economy, why shouldn’t we place them at every state, county, or even household border? I hope this idea sounds crazy because it is. Obviously everyone would be far poorer if the government were to restrict trade between states, counties, or households. That is obvious from our personal experience living our lives. Imagine trying to obtain everything we use in the modern day without trading with someone outside your household. It would be impossible. But the defender of household tariffs might say “It is important that we protect jobs in this household! If we give our money to other households we will be weaker as a household.” Substitute the word nation for household and you have the standard argument for tariffs today. Defenders of this statement, believe that economic logic changes when a national border is crossed, so is this true?
Why would any exchange made inside a country be beneficial, but every exchange made between countries be detrimental? What changed? There is no economic difference between a national border and a state, county, or household border. They are all invisible judicial lines that determine taxes, voting, and laws. But, borders do not change the fact that when two people make a voluntary exchange they both benefit from it at the time of the exchange. (If they didn’t expect to benefit they would not have voluntarily made the exchange.) When an American voluntarily trades with a Chinese man the they both benefit. By imposing tariffs on Chinese imports the government is harming Americans.
Again the ridiculousness of tariffs becomes obvious when we consider putting tariffs on all goods we import into our households. In this scenario, everyone would have to pay astronomically more for all the goods they want. This effect of tariffs is less pronounced for the U.S. as a nation because it is so large (therefore less trading partners are excluded), but nevertheless it is still there. How is this a good thing? How can a government agent’s theft of your money benefit you? It doesn’t and never has. Economic logic does not change when you cross a national border. Tariffs are only enacted to benefit special interest groups or raise revenue not to benefit average Americans.
I intended to make this article short and sweet, so if you would like a more detailed overview of protectionism, tariffs, and import quotas, I encourage you to check out my longer article on Protectionism here.
Totally agree with you. It’s a shame that government intervenes so much in just about everything and then somehow spins it in a way that makes people think it’s a good think for them. Sad.