The Long History of the Economic Costs of Higher Tariffs

The Daily Signal | 3/15/2019 | Staff
MonkeyBubble (Posted by) Level 3
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Patrick Tyrrell is a research coordinator in The Heritage Foundation’s Center for International Trade and Economics.

Anthony B. Kim researches international economic issues at The Heritage Foundation, with a strong focus on economic freedom. Kim is the research manager of the Index of Economic Freedom, the flagship product of the Heritage Foundation in partnership with The Wall Street Journal. Read his research.

Effects - Tariffs

What are the economic effects of tariffs?

That question has been studied in detail dating back to Adam Smith’s “The Wealth of Nations” in 1776, and a general consensus was long ago agreed to among economists.

Tariffs - Health - Happiness - Fortunes - Trade

Tariffs decrease the health, happiness, and fortunes of those engaging in trade by:

Steering trade towards inefficient producers.

Smuggling - Goods

Encouraging the covert smuggling of goods.

Rewarding political lobbies rather than productivity and creating vested special-interest groups that depend on government favors for profitability.

Losses - Consumer - Costs - Gains - Producers

Creating dead-weight losses as consumer costs typically far outweigh any gains to protected producers.

Harming domestic producers by provoking retaliatory tariffs from other nations.

Production - Costs - Producers - Imports - Production

Increasing production costs of domestic producers that use imports in their production processes.

As these effects...
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