<p>The answer below is a bit informal but still since there are a few parts to your question I think we need to go back to basics.</p>
<p><strong>Background</strong></p>
<p>A introductory international trade course would show that while free unrestricted trade is generally beneficial for nations as a whole, there are &quot;winners&quot; and &quot;losers&quot; from unrestricted trade policy.</p>
<p>As an example if consumers have a choice between more expensive domestically produced products and cheaper foreign products (assuming these products are homogeneous), consumers will choose the foreign products.</p>
<p>The thing to remember though is that one person's spending is another person's income, so by consumers purchasing these cheaper foreign products, they are reducing the revenues of domestic firms.</p>
<p>In this case the winners are domestic consumers and foreign producers and losers are domestic firms.</p>
<p>If for some reason we want to protect the revenue's of our domestic firms from foreign competition we will use tariffs to do so. If the regulator is accurate they will do so in order raise the price of foreign products so they are on par or more expensive than domestic products. In this case domestic consumers will either be indifferent between foreign and domestic products or strictly prefer domestic products.</p>
<p>In this case the &quot;winners&quot; from the introduction of a tariff are the domestic firms and &quot;losers&quot; are the domestic consumers (who see higher prices) and foreign firms which lose out on revenue.</p>
<p><strong>Will The introduction of tariffs help growth in the USA?</strong></p>
<p>Based on &quot;Back of the Napkin&quot; reasoning:</p>
<p>A tariff is just a tax levied on foreign goods. we know that tax revenue will be collected and then used to finance other projects adding to our nations income. We also know that it will reduce the demand for foreign goods.</p>
<p>So far this sounds good.</p>
<p>The one concern however would be with reference to retaliatory tariffs from foreign countries which would reduce the demand for the domestic countries exports.</p>
<p>So if we are thinking about Economic growth, from the back of the napkin we should expect some but not much.</p>
<p><strong>Is there pragmatic historical evidence about this issue?</strong></p>
<p>A quick google scholar search of &quot;Tariffs and Economic Growth&quot; gave me this paper as one of the first results: <a href="https://link.springer.com/article/10.1007/s10887-011-9061-6" rel="noreferrer">Tariffs and economic growth in the first era of globalization</a>. There's some cute pictures which naively shows a slightly positive relationship between economic growth and average tariff level.</p>
<p><a href="https://i.sstatic.net/F0oWrYFV.png" rel="noreferrer"><img src="https://i.sstatic.net/F0oWrYFV.png" alt="Tariff Levels and Annual Growth " /></a></p>
<p><a href="https://i.sstatic.net/QgObfVnZ.png" rel="noreferrer"><img src="https://i.sstatic.net/QgObfVnZ.png" alt="enter image description here" /></a></p>
<p>Clearly this is older work, but still in the absence of the politics and retaliatory tariffs we could see some growth but I would not bet on it.</p>
<p><strong>Summary</strong></p>
<ol>
<li>Tariffs are a tool for protecting domestic firms from foreign competition and collecting tax revenue.</li>
<li>There's no sure thing we can say about the relationship between economic growth and tariffs empirically, but from &quot;back of the napkin reasoning&quot; we might see some growth.</li>
</ol>

CC BY-SA 4.0
2024-11-13T04:46:34.473Z
I think it's important to mention, when including graphs like those, whether or not there's evidence for a *causal* relationship between the displayed variables. Especially in OP's context, asking "will the introductions of tariffs and their consequences help economic growth in the USA?"
nitsua60
CC BY-SA 4.0
2024-11-13T08:31:02.767Z
One more consideration: if winners from tariffs are domestic firms, then the winners can sometimes also be their employees, depending on how the increase in demand is distributed. If (and that's a big if) the lowest-income employees benefit the most, then it is possible that this may more than offset the damage domestic consumers (the same people!) would see from higher prices. All in all, there are a lot of cogs in the machinery that makes up the economy.
Kevin Keane
CC BY-SA 4.0
2024-11-13T12:02:59.303Z
Further additions: This answer (as well as almost all modern economics) make the (heavily debateable) assertion of the market working as conceptualized. The most obvious caveat would be - what's partly happening with anti-China tariffs - prices being skewed by subsidies. But that is only the most direct and obvious challenge to that assertion.
Hobbamok
CC BY-SA 4.0
2024-11-13T15:51:54.487Z
One of the basic assumptions behind using tariffs to protect domestic producers is that there *are* domestic producers. Lots of US manufacturing disappeared a long time ago due to cheap foreign competition, there's no one here to protect.
Barmar
CC BY-SA 4.0
2024-11-13T19:20:12.307Z
It's probably worth making a distinction between consumer goods and intermediate goods.  As this answer discusses, tariffs on consumer goods provide a competitve advantage to domestic manufacturers.  On the other hand, tariffs on intermediate goods may increase the expenses of domestic manufacturers of consumer goods (but also provide a competitive advantage to domestic manufacturers of intermediate goods).
Brian
CC BY-SA 4.0
2024-11-13T19:58:20.957Z
Leaving aside the "correlation is not causation" argument for a moment, why on Earth would we plot tariffs 1870-1880 vs annual growth 1870-1913?
frodoskywalker
CC BY-SA 4.0
2024-11-14T08:11:29.273Z
Is there any more recent work on tariffs that is not about the 19th century?  The world has changed.
gerrit
CC BY-SA 4.0
2024-11-14T11:59:29.380Z
@frodoskywalker Counting the growth for a few years afterwards seems justified because it would have a lagging effect, but that doesn't explain the particular time period (stopping before WWI makes sense, but why only count tariffs to 1880?). Starting both in 1870 makes sense if you want to capture both short-term harm and long term benefit. 

OTOH, the paper was arguing that the benefit, if any, was minimal.
user1567459
CC BY-SA 4.0
2024-11-14T22:23:50.117Z
I don't trust a correlation bar from data points that it is easier to draw a constellation in than it is to determine what the average slope is.
Questor
CC BY-SA 4.0
2024-11-15T15:41:14.373Z
@Questor thats the point. Empirically there's no clear relationship between tariffs and economic growth
EconJohn
CC BY-SA 4.0
2024-11-12T20:28:44.140Z
2024-11-14T16:57:31.317Z
2024-11-14T16:57:31.317Z
EconJohn
<blockquote>
<p>are there any solid economic reasons to the indiscriminate use of tariffs. In other words, will the introductions of tariffs and their consequences help economic growth in the USA?</p>
</blockquote>
<p>There aren't economic reasons for indiscriminate use of tariffs. Tariffs are generally inefficient, from economic perspective (e.g. see Krugman et al International Economics: Theory and Policy 9th ed). There are some specific reasons when tariffs can be efficient. For example, one can make case on tariffs for national defense, or to protect infant industries and so on, but there isn't an general result that would show tariffs are economically beneficial.</p>
<p>There could be beneficial in some situations (as discussed above), however, even in those cases the benefits exist when we assume they are implemented by benevolent social planner. In real life there are public choice issues, for example, the value of tariffs might be influenced by lobbying from industries that benefit (<a href="https://www.aeaweb.org/articles?id=10.1257/jep.1.2.131" rel="noreferrer">Krugman, 1987</a>). Consequently, there is a widespread policy consensus in economics that are generally not good economic policy as <a href="https://www.kentclarkcenter.org/surveys/free-trade/" rel="noreferrer">most top policy economists</a> believe gains of free trade outweigh the costs.</p>
<p>There is little reason to believe that tariffs would allow US grow faster. A case for tariffs could be made on national defense grounds, but this would still hurt US economically, the point is that the economic disadvantage could be offset by potential military advantages (e.g. a chip tariff would encourage domestic production of chips, which even if less efficient than purchasing chips from abroad, would give US edge in conflict as enemies would not be able to disrupt chip shipments, for example by blockading Taiwan).</p>
<blockquote>
<p>Is there pragmatic and historical evidence about this issues?</p>
</blockquote>
<p>Yes there is a lot of historical evidence. International trade is one of the subjects in economics that has the longest history of both theoretically and empirically. For example, even Smith's Wealth of Nations was heavily concerned with trade theory.</p>
<p>There are a lots of papers on this topic. If you are a layman you would probably benefit most from just reading undergraduate textbook. Abovementioned, Krugman et al International Economics: Theory and Policy 9th ed, is widely used international trade textbook at good universities, but ultimately all undergraduate textbooks are pretty much same so any standard bachelor level international trade textbook will give you some historical context.</p>

CC BY-SA 4.0
2024-11-13T12:03:41.270Z
" but there isn't an general result that would show tariffs are economically beneficial." Disproven by African farmers being ruined by subsidized EU produce.
Hobbamok
CC BY-SA 4.0
2024-11-13T16:13:52.907Z
@Hobbamok That is a complete non sequitur. 1. Tariffs are not export subsidies, they do not encourage exports. 2. Economy is not necessarily zero sum game. Loss of someone does not imply win of someone else. Some economic interactions are Win-Win, some Win-Loss and some Loss-Loss. Studies show that these EU subsidies also hurt EU economy to the tune of  about 40 billion euros per year, so they are net loss-loss both for EU and Africans (e.g. see [Boulanger and Jomini 2010][https://ecipe.org/wp-content/uploads/2014/12/BoulangerJomini_removingCAP112009.pdf])
1muflon1
CC BY-SA 4.0
2024-11-13T20:32:00.353Z
@1muflon1 I think one general justification for EU produce subsidies (and tariffs!) is indeed the strategic value of being able to produce the necessary food domestically (in the EU), similar to decades of coal subsidies, even if it is economically costly. Another reason is the smoothing of domestic "markets" (at the expense of amplifying international market oscillations) both for producers and consumers. Apart from political reasons, this may have some economical benefits because the avoided expansions and constrictions at home would come with friction costs (which are effectively exported).
Peter - Reinstate Monica
CC BY-SA 4.0
2024-11-13T20:55:16.733Z
@Peter-ReinstateMonica yes that is the justification politicians give for them, but the comment I responded to was talking solely about economic benefit. I doubt that these subsidies help to smooth business cycle, agriculture is not that big part of economy anymore we do not live in medieval times where economic cycles were connected to agricultural production. In modern economies agriculture is inconsequential for business cycle in most economies, an exception might be small open economies that specialize in export of some specific agricultural products
1muflon1
CC BY-SA 4.0
2024-11-14T08:12:58.160Z
Tariffs can be used to counter unfair competition.  For example, if domestic producers must pay a CO₂ tax (or other pigouvian taxes), it is reasonably to levy equivalent tariffs on imports.  This is being discussed or perhaps implemented (not sure) in the EU.  And keeping the biosphere habitable is economically beneficial in the long run (but I don't know if global negative externalities on a 300-year timescale are accounted for in those models).  Or do pigouvian taxes on imports not count as tariffs?
gerrit
CC BY-SA 4.0
2024-11-14T21:08:04.707Z
@1muflon1 wild that you use words like non sequitur while not being able to read the comment you are replying to. Nobody ever said that tarrifs are export subsidies or encourage exports, where did you even get that from?  2. nobody said it isn't. My point was that you are making assertions in your answer that you are not open about because you likely did not even realize them yourself. Assertions that are heavily debateable.
Hobbamok
CC BY-SA 4.0
2024-11-14T22:29:12.440Z
"potential military advantage" There is nothing potential about it. The military advantage that the US bought during WWI/WWI was that they were an agricultural and manufacturing juggernaut that could build things faster than anyone else... The US was able to ship cake and ice-cream to the frontlines while the Germans were eating shoe leather.
Questor
CC BY-SA 4.0
2024-11-12T20:20:10.047Z
2024-11-12T20:20:10.047Z
1muflon1
<p>The general economic theory says that tariffs are bad for economic growth. If there is a tariff on some good that means customers need to pay more for this good than they would otherwise (regardless of whether they buy the import and pay the tariff or whether they buy the more expensive domestic alternative). This is well established, has been known for a long time, is covered in most econ textbooks that talk about trade and represents the general consensus of most modern economists.</p>
<p>However, there are some special circumstances where a tariff might be in best interest of a country. The benefits may be non-economical, so one could argue that a little bit of economic growth is sacrificed in order to achieve independence of foreign powers or to preserve some industry (and the associated skills and knowledge) in the country. There is also the idea that one protects a local industry from foreign competitors through tariffs now in the hope that in the future it will mature and be able to compete without tariffs.</p>
<p>Whenever a tariff is imposed (and there is an attempt to make it sound economically sensible) it is usually argued that this is one of the special cases where a tariff would be beneficial overall. However, judging the value of these arguments is very difficult and the historical experience is mixed at best.</p>

CC BY-SA 4.0
2024-11-14T08:20:40.493Z
How do pigouvian taxes and pigouvian tariffs fit in?  It is bad for economic growth to destroy the environment, so if we consider projected economic growth over (say) the next 300 years, then tariffs on imports that damage the global biosphere may be beneficial?  Or is only short-term economic growth counted, regardless of external costs?
gerrit
CC BY-SA 4.0
2024-11-14T15:23:52.760Z
@gerrit Interesting question that I don't know the answer to.
quarague
CC BY-SA 4.0
2024-11-13T10:01:54.500Z
2024-11-13T10:01:54.500Z
quarague
<p>Is there justification for tariffs?</p>
<p>The above arguments are all valid.  But we must consider that the stable global world order of the last 70 years is shifting.  We are no longer in a time of continued world population growth, with commensurate continuing growth in demand.  We have moved into a world of of falling demographics.  Demand is starting to fall across the globe.  In some places the fall in population is precipitating a fall in the capacity of manufacturing plant.  The world may soon not produce and distribute enough food to feed itself.  We don't have a good economic model for the world that is coming to be.</p>
<p>Remember the days of Empire, when the great nations rose because they controlled all off the food, energy and resources that they needed inside a single economy?  I hope that the days of small countries that have specialized economies and reliance on a global order that allows them to thrive through trade are not vanishing.  They have not vanished yet.  The choices of our leaders can lead us forward into a great future of wealth for all, or cause most of the world economies to shudder and falter.  Time will tell.</p>
<p>For America's part, it is already undergoing the largest period of industrialization in our history.  America has food, energy and resource security in the face of growing world uncertainty in these areas.  Foreign concerns are already shifting their manufacturing plant to America in order to insure ongoing operations.  Tariffs are not needed for this.</p>

CC BY-SA 4.0
2024-11-14T08:21:59.560Z
NB: "above arguments" is not the best phrasing on SE, because if your answer gets upvoted or users sort their answers differently, your answer will end up above the others (and new answers may appear after yours).
gerrit
CC BY-SA 4.0
2024-11-14T13:37:42.267Z
gerrit, Thank you for your insight
BuildItStrong
CC BY-SA 4.0
2024-11-13T21:16:17.893Z
2024-11-13T21:40:13.713Z
2024-11-13T21:40:13.713Z
BuildItStrong
<p>The following extract is from <a href="https://www.newsweek.com/trump-cant-stop-talking-about-tariffs-michigan-roundtable-1971565" rel="noreferrer">Newsweek.com</a>:</p>
<blockquote>
<p>Former President Donald Trump waxed poetic about his love of tariffs again on Friday — including his love for the word itself.</p>
<p>Speaking at a roundtable with voters in Auburn Hills, Michigan, the Republican presidential nominee said he thinks &quot;tariff&quot; is &quot;the most beautiful word in the dictionary.&quot;</p>
<p>&quot;You have other words that are damn nice, like 'love,'&quot; Trump said, while others in the room laughed. &quot;But I tell you, I think it's more beautiful than 'love.'&quot;</p>
</blockquote>
<p>Apart for the political and propagandistic use of the term “tariffs”, are there any solid economic reasons  to the indiscriminate use of tariffs.
In other words, will the introductions of tariffs and their consequences  help economic growth in the USA? Is there pragmatic and historical evidence  about this issues?</p>

CC BY-SA 4.0
2024-11-13T04:46:56.563Z
If we look at the countries, primarily China, President elect Trump, has imposed tariffs on, at least part of his reasoning for tariffs is not economic, but political. China's human rights abuses and other factors seem to come into play. China is in the habit of stealing intellectual property from the U.S. and other countries. China was most heavily affected by his tariffs. $\$$34 billion for China vs. 1 billion for India.
Likewise, he announced tariff on Mexico "until such time as illegal migrants coming through Mexico, and into our Country, STOP"
https://en.wikipedia.org/wiki/Trump_tariffs
nickalh
CC BY-SA 4.0
2024-11-13T19:19:42.150Z
@nickalh Not for Trump. His reasoning starts and finishes with one word: isolationism. Human rights aren't anywhere on the list of things he cares about.
Graham
CC BY-SA 4.0
2024-11-14T08:08:00.897Z
@nickalh  The USA caring about human rights abuses?  That's a good one, and would certainly be a first!  Other factors, sure, but the USA have a long history of actively supporting or at least tolerating human rights abuses from its allies.
gerrit
CC BY-SA 4.0
2024-11-14T15:20:10.827Z
@gerrit: The USA does care about rights abuses.... of its own citizens.  Abuse of other foreigners or the locals indeed is unlikely to ever get more than strong words.  Which may be less than ideal, but it's completely standard across all countries.
Ben Voigt
<international-trade><protectionism>
On the love for tariffs: What are the benefits of Tariffs for a Nation's Economy?
user067531
# On the love for tariffs: What are the benefits of Tariffs for a Nation's Economy?

(Asked by: username_0 on 2024-11-12)

The following extract is from [Newsweek.com](https://www.newsweek.com/trump-cant-stop-talking-about-tariffs-michigan-roundtable-1971565):

> Former President Donald Trump waxed poetic about his love of tariffs again on Friday — including his love for the word itself.
>
> Speaking at a roundtable with voters in Auburn Hills, Michigan, the Republican presidential nominee said he thinks "tariff" is "the most beautiful word in the dictionary."
>
> "You have other words that are damn nice, like 'love,'" Trump said, while others in the room laughed. "But I tell you, I think it's more beautiful than 'love.'"

Apart for the political and propagandistic use of the term “tariffs”, are there any solid economic reasons to the indiscriminate use of tariffs.
In other words, will the introductions of tariffs and their consequences help economic growth in the USA? Is there pragmatic and historical evidence about this issues?

**Tags:** international-trade, protectionism

> **Comments:**
> **username_1**: If we look at the countries, primarily China, President elect Trump, has imposed tariffs on, at least part of his reasoning for tariffs is not economic, but political. China's human rights abuses and other factors seem to come into play. China is in the habit of stealing intellectual property from the U.S. and other countries. China was most heavily affected by his tariffs. $\$$34 billion for China vs. 1 billion for India. Likewise, he announced tariff on Mexico "until such time as illegal migrants coming through Mexico, and into our Country, STOP" https://en.wikipedia.org/wiki/Trump_tariffs  
> **username_2**: @username_1 Not for Trump. His reasoning starts and finishes with one word: isolationism. Human rights aren't anywhere on the list of things he cares about.  
> **username_3**: @username_1  The USA caring about human rights abuses?  That's a good one, and would certainly be a first!  Other factors, sure, but the USA have a long history of actively supporting or at least tolerating human rights abuses from its allies.  
> **username_4**: @username_3: The USA does care about rights abuses.... of its own citizens.  Abuse of other foreigners or the locals indeed is unlikely to ever get more than strong words.  Which may be less than ideal, but it's completely standard across all countries.  

---

## 4 answers

### Answer by username_5 on 2024-11-12. Score: 16

The answer below is a bit informal but still since there are a few parts to your question I think we need to go back to basics.

**Background**

A introductory international trade course would show that while free unrestricted trade is generally beneficial for nations as a whole, there are "winners" and "losers" from unrestricted trade policy.

As an example if consumers have a choice between more expensive domestically produced products and cheaper foreign products (assuming these products are homogeneous), consumers will choose the foreign products.

The thing to remember though is that one person's spending is another person's income, so by consumers purchasing these cheaper foreign products, they are reducing the revenues of domestic firms.

In this case the winners are domestic consumers and foreign producers and losers are domestic firms.

If for some reason we want to protect the revenue's of our domestic firms from foreign competition we will use tariffs to do so. If the regulator is accurate they will do so in order raise the price of foreign products so they are on par or more expensive than domestic products. In this case domestic consumers will either be indifferent between foreign and domestic products or strictly prefer domestic products.

In this case the "winners" from the introduction of a tariff are the domestic firms and "losers" are the domestic consumers (who see higher prices) and foreign firms which lose out on revenue.

**Will The introduction of tariffs help growth in the USA?**

Based on "Back of the Napkin" reasoning:

A tariff is just a tax levied on foreign goods. we know that tax revenue will be collected and then used to finance other projects adding to our nations income. We also know that it will reduce the demand for foreign goods.

So far this sounds good.

The one concern however would be with reference to retaliatory tariffs from foreign countries which would reduce the demand for the domestic countries exports.

So if we are thinking about Economic growth, from the back of the napkin we should expect some but not much.

**Is there pragmatic historical evidence about this issue?**

A quick google scholar search of "Tariffs and Economic Growth" gave me this paper as one of the first results: [Tariffs and economic growth in the first era of globalization](https://link.springer.com/article/10.1007/s10887-011-9061-6). There's some cute pictures which naively shows a slightly positive relationship between economic growth and average tariff level.

[![Tariff Levels and Annual Growth ](https://i.sstatic.net/F0oWrYFV.png)](https://i.sstatic.net/F0oWrYFV.png)

[![enter image description here](https://i.sstatic.net/QgObfVnZ.png)](https://i.sstatic.net/QgObfVnZ.png)

Clearly this is older work, but still in the absence of the politics and retaliatory tariffs we could see some growth but I would not bet on it.

**Summary**

1. Tariffs are a tool for protecting domestic firms from foreign competition and collecting tax revenue.
2. There's no sure thing we can say about the relationship between economic growth and tariffs empirically, but from "back of the napkin reasoning" we might see some growth.

> **Comments:**
> **username_6**: I think it's important to mention, when including graphs like those, whether or not there's evidence for a *causal* relationship between the displayed variables. Especially in OP's context, asking "will the introductions of tariffs and their consequences help economic growth in the USA?"  
> **username_7**: One more consideration: if winners from tariffs are domestic firms, then the winners can sometimes also be their employees, depending on how the increase in demand is distributed. If (and that's a big if) the lowest-income employees benefit the most, then it is possible that this may more than offset the damage domestic consumers (the same people!) would see from higher prices. All in all, there are a lot of cogs in the machinery that makes up the economy.  
> **username_8**: Further additions: This answer (as well as almost all modern economics) make the (heavily debateable) assertion of the market working as conceptualized. The most obvious caveat would be - what's partly happening with anti-China tariffs - prices being skewed by subsidies. But that is only the most direct and obvious challenge to that assertion.  
> **username_9**: One of the basic assumptions behind using tariffs to protect domestic producers is that there *are* domestic producers. Lots of US manufacturing disappeared a long time ago due to cheap foreign competition, there's no one here to protect.  
> **username_10**: It's probably worth making a distinction between consumer goods and intermediate goods.  As this answer discusses, tariffs on consumer goods provide a competitve advantage to domestic manufacturers.  On the other hand, tariffs on intermediate goods may increase the expenses of domestic manufacturers of consumer goods (but also provide a competitive advantage to domestic manufacturers of intermediate goods).  
> **username_11**: Leaving aside the "correlation is not causation" argument for a moment, why on Earth would we plot tariffs 1870-1880 vs annual growth 1870-1913?  
> **username_3**: Is there any more recent work on tariffs that is not about the 19th century?  The world has changed.  
> **username_12**: @username_11 Counting the growth for a few years afterwards seems justified because it would have a lagging effect, but that doesn't explain the particular time period (stopping before WWI makes sense, but why only count tariffs to 1880?). Starting both in 1870 makes sense if you want to capture both short-term harm and long term benefit.   OTOH, the paper was arguing that the benefit, if any, was minimal.  
> **username_13**: I don't trust a correlation bar from data points that it is easier to draw a constellation in than it is to determine what the average slope is.  
> **username_5**: @username_13 thats the point. Empirically there's no clear relationship between tariffs and economic growth  

---

### Answer by username_14 on 2024-11-12. Score: 13

> are there any solid economic reasons to the indiscriminate use of tariffs. In other words, will the introductions of tariffs and their consequences help economic growth in the USA?

There aren't economic reasons for indiscriminate use of tariffs. Tariffs are generally inefficient, from economic perspective (e.g. see Krugman et al International Economics: Theory and Policy 9th ed). There are some specific reasons when tariffs can be efficient. For example, one can make case on tariffs for national defense, or to protect infant industries and so on, but there isn't an general result that would show tariffs are economically beneficial.

There could be beneficial in some situations (as discussed above), however, even in those cases the benefits exist when we assume they are implemented by benevolent social planner. In real life there are public choice issues, for example, the value of tariffs might be influenced by lobbying from industries that benefit ([Krugman, 1987](https://www.aeaweb.org/articles?id=10.1257/jep.1.2.131)). Consequently, there is a widespread policy consensus in economics that are generally not good economic policy as [most top policy economists](https://www.kentclarkcenter.org/surveys/free-trade/) believe gains of free trade outweigh the costs.

There is little reason to believe that tariffs would allow US grow faster. A case for tariffs could be made on national defense grounds, but this would still hurt US economically, the point is that the economic disadvantage could be offset by potential military advantages (e.g. a chip tariff would encourage domestic production of chips, which even if less efficient than purchasing chips from abroad, would give US edge in conflict as enemies would not be able to disrupt chip shipments, for example by blockading Taiwan).

> Is there pragmatic and historical evidence about this issues?

Yes there is a lot of historical evidence. International trade is one of the subjects in economics that has the longest history of both theoretically and empirically. For example, even Smith's Wealth of Nations was heavily concerned with trade theory.

There are a lots of papers on this topic. If you are a layman you would probably benefit most from just reading undergraduate textbook. Abovementioned, Krugman et al International Economics: Theory and Policy 9th ed, is widely used international trade textbook at good universities, but ultimately all undergraduate textbooks are pretty much same so any standard bachelor level international trade textbook will give you some historical context.

> **Comments:**
> **username_8**: " but there isn't an general result that would show tariffs are economically beneficial." Disproven by African farmers being ruined by subsidized EU produce.  
> **username_14**: @username_8 That is a complete non sequitur. 1. Tariffs are not export subsidies, they do not encourage exports. 2. Economy is not necessarily zero sum game. Loss of someone does not imply win of someone else. Some economic interactions are Win-Win, some Win-Loss and some Loss-Loss. Studies show that these EU subsidies also hurt EU economy to the tune of  about 40 billion euros per year, so they are net loss-loss both for EU and Africans (e.g. see [Boulanger and Jomini 2010][https://ecipe.org/wp-content/uploads/2014/12/BoulangerJomini_removingCAP112009.pdf])  
> **username_15**: @username_14 I think one general justification for EU produce subsidies (and tariffs!) is indeed the strategic value of being able to produce the necessary food domestically (in the EU), similar to decades of coal subsidies, even if it is economically costly. Another reason is the smoothing of domestic "markets" (at the expense of amplifying international market oscillations) both for producers and consumers. Apart from political reasons, this may have some economical benefits because the avoided expansions and constrictions at home would come with friction costs (which are effectively exported).  
> **username_14**: @username_15-ReinstateMonica yes that is the justification politicians give for them, but the comment I responded to was talking solely about economic benefit. I doubt that these subsidies help to smooth business cycle, agriculture is not that big part of economy anymore we do not live in medieval times where economic cycles were connected to agricultural production. In modern economies agriculture is inconsequential for business cycle in most economies, an exception might be small open economies that specialize in export of some specific agricultural products  
> **username_3**: Tariffs can be used to counter unfair competition.  For example, if domestic producers must pay a CO₂ tax (or other pigouvian taxes), it is reasonably to levy equivalent tariffs on imports.  This is being discussed or perhaps implemented (not sure) in the EU.  And keeping the biosphere habitable is economically beneficial in the long run (but I don't know if global negative externalities on a 300-year timescale are accounted for in those models).  Or do pigouvian taxes on imports not count as tariffs?  
> **username_8**: @username_14 wild that you use words like non sequitur while not being able to read the comment you are replying to. Nobody ever said that tarrifs are export subsidies or encourage exports, where did you even get that from?  2. nobody said it isn't. My point was that you are making assertions in your answer that you are not open about because you likely did not even realize them yourself. Assertions that are heavily debateable.  
> **username_13**: "potential military advantage" There is nothing potential about it. The military advantage that the US bought during WWI/WWI was that they were an agricultural and manufacturing juggernaut that could build things faster than anyone else... The US was able to ship cake and ice-cream to the frontlines while the Germans were eating shoe leather.  

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### Answer by username_16 on 2024-11-13. Score: 3

The general economic theory says that tariffs are bad for economic growth. If there is a tariff on some good that means customers need to pay more for this good than they would otherwise (regardless of whether they buy the import and pay the tariff or whether they buy the more expensive domestic alternative). This is well established, has been known for a long time, is covered in most econ textbooks that talk about trade and represents the general consensus of most modern economists.

However, there are some special circumstances where a tariff might be in best interest of a country. The benefits may be non-economical, so one could argue that a little bit of economic growth is sacrificed in order to achieve independence of foreign powers or to preserve some industry (and the associated skills and knowledge) in the country. There is also the idea that one protects a local industry from foreign competitors through tariffs now in the hope that in the future it will mature and be able to compete without tariffs.

Whenever a tariff is imposed (and there is an attempt to make it sound economically sensible) it is usually argued that this is one of the special cases where a tariff would be beneficial overall. However, judging the value of these arguments is very difficult and the historical experience is mixed at best.

> **Comments:**
> **username_3**: How do pigouvian taxes and pigouvian tariffs fit in?  It is bad for economic growth to destroy the environment, so if we consider projected economic growth over (say) the next 300 years, then tariffs on imports that damage the global biosphere may be beneficial?  Or is only short-term economic growth counted, regardless of external costs?  
> **username_16**: @username_3 Interesting question that I don't know the answer to.  

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### Answer by username_17 on 2024-11-13. Score: 3

Is there justification for tariffs?

The above arguments are all valid. But we must consider that the stable global world order of the last 70 years is shifting. We are no longer in a time of continued world population growth, with commensurate continuing growth in demand. We have moved into a world of of falling demographics. Demand is starting to fall across the globe. In some places the fall in population is precipitating a fall in the capacity of manufacturing plant. The world may soon not produce and distribute enough food to feed itself. We don't have a good economic model for the world that is coming to be.

Remember the days of Empire, when the great nations rose because they controlled all off the food, energy and resources that they needed inside a single economy? I hope that the days of small countries that have specialized economies and reliance on a global order that allows them to thrive through trade are not vanishing. They have not vanished yet. The choices of our leaders can lead us forward into a great future of wealth for all, or cause most of the world economies to shudder and falter. Time will tell.

For America's part, it is already undergoing the largest period of industrialization in our history. America has food, energy and resource security in the face of growing world uncertainty in these areas. Foreign concerns are already shifting their manufacturing plant to America in order to insure ongoing operations. Tariffs are not needed for this.

> **Comments:**
> **username_3**: NB: "above arguments" is not the best phrasing on SE, because if your answer gets upvoted or users sort their answers differently, your answer will end up above the others (and new answers may appear after yours).  
> **username_17**: username_3, Thank you for your insight  

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