You can’t make a case that tariffs per se improve the well being of the people in the nation levying the tariffs. Perhaps the threat of a tariff can wrest concessions from the threatened, but if the tariff is actually instituted, it will diminish rather than enhance overall utility. The point is not in dispute within the economics profession. From el gato malo at boriquagato.substack.com:
because it’s time we did
this seems a common current formulation. these are both friends and gatopals™, smart people who i know personally and respect, but i disagree with them on this one.
let’s explore why.
the short answer to this final question would seem to be that all tariffs impose a deadweight loss upon the citizenry of the imposing country.
this is not optional nor even really debatable. it’s just math and can be shown as certainty. tariffs constitute a really nasty confluence of incentives as domestic producers and government both wind up better off from them. these are concentrated gains, gains that are visible and useful for populist grandstanding, but consumers are made worse off and the size of their loss is greater than the gains to producers and government.
it’s a recipe for crony corporatist favoritism and finger on scale oligopoly.
it’s also a recipe for large aggregate losses of production and consumption.
