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Tariffs – Good or Bad?
The question before us is ‘are tariffs good or bad?’ The answer may not be as simple as a yes or no.
If two companies are competing with products equal in quality and price then tariffs (an additional price added to a product because it is coming from another country; a tax of sorts that is negotiated by the two countries) will increase the foreign-made product and make the domestic product more attractive to the consumer.
If the prices are unequal with the domestic product cheaper than the foreign-made product then the domestic product will be the preferred buy.
If the domestic product is more expensive and the tariff brings the prices closer to each other then it is up to the consumer to value other aspects of the product (color, materials, design, for examples) to decide if the foreign-made product is the better purchase.
Those are easy questions to contemplate.
The real issues come in when there is no means to compare domestic versus foreign, such as a country with an exclusive product or a unique creation, such as cars, metals, steel, foods, and items of a higher-quality than can be produced domestically. Usually, the real issue comes down to price where the foreign-made product cannot be created domestically for the same price.
Tariffs, by their design, are a means to force the people of a country to purchase products made inside the country despite problems in quality and workmanship because the foreign-made products are too expensive despite being a better purchase. The manufacturers inside the country are the only ones to benefit but this ‘win’ is short-lived if the product will be abandoned as soon as the tariffs are decreased in the future.
But the true loss created by tariffs is the loss of international communication as tariffs create barriers to trade and communication. International treaties and trade agreements may be the glue that keeps countries civil with each other. Absent a reason to interact for commercial purposes may create a vacuum to be filled with gossip, innuendo, lies, ethnic prejudice, and rumors that can make new relations in the future difficult or impossible.
Simply, when there is trade it behooves both countries to get along on many levels and stop them from considering hostile actions towards each other.
Tariffs are bad despite the short-term benefit to a few companies that can sell their products in greater numbers and amounts to their own people.
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