Are tariffs good for the economy, or do they do more harm than good? This is something people have been wondering for years. At first, I thought they were bad since they mainly hurt businesses that need to import supplies from other countries. However, after researching more, I realized that tariffs are complex and have both benefits and drawbacks.
First, it is important to know what tariffs are. Oxford Economics defines tariffs as “taxes imposed by a government on goods and services imported from other countries.” They provide income for the government, but they also affect businesses and consumers.
One clear benefit is the revenue that tariffs give to the government. For example, after tariffs increased in recent years, the U.S. government revenue from tariffs went up 148%, with estimates reaching $159.3 billion. Tariffs can also support domestic industries by making local products more competitive. Alexander Hamilton once raised tariffs in the 19th century to protect U.S. industries, giving them time to grow without as much foreign competition. Tariffs can also encourage companies to manufacture domestically, which could mean more jobs and less reliance on imports.
On the other hand, tariffs increase costs for consumers. When the U.S. put tariffs on steel and aluminum in 2018, car and construction companies faced higher prices, which then raised the cost of cars, appliances and other goods. Families with lower incomes felt this even more. Tariffs can also trigger retaliation, like when China responded with tariffs on U.S. farm products, hurting American farmers and forcing the government to provide financial aid.
History also shows risks. During the Great Depression, tariffs contributed to a collapse in global trade and rising unemployment.
With all these being said, I think it is fair to conclude that we can not know if they are good or bad. That is something that only time will tell, and this will become either a great success that will be in history forever or an awful mistake that we will remember for a very long time.
