Opinion

Political: Are Tariffs Economically Beneficial?

Anagha Nagesh and Naomi George • April 23, 2025

Pro

Tariffs, economic tools that increase costs for domestic imports, have been a controversial issue in economic policy in recent years. Critics often argue that they can increase costs for consumers, while supporters argue their importance for domestic production. When used correctly and carefully, tariffs can protect domestic industries, promote fair trade, and ultimately create a healthier global marketplace.

The primary argument in support of tariffs is that they help promote domestic industries from foreign competition. Countries with lower labor costs that emphasize domestic production can flood American markets with more affordable goods, making it difficult for local manufacturers to compete. Thus, tariffs level the playing field, ensuring that domestic producers have a fair chance to thrive in the economy. One key example is the Tariff of 1816, which was imposed after the War of 1812 in order to bolster American business. The tariff, a temporary measure that expired in 1819, allowed domestic business to grow with little public debate, according to an analysis by historian Heather Michon.

In addition to improving domestic production, tariffs can also encourage fair trade in the global marketplace. By imposing tariffs, a country can push back against unfair trade practices by other nations, encouraging foreign competitors to engage in fairer trade. For example, the US retaliated by imposing tariffs on China in response to violations of intellectual property rights. Such tariffs contributed to the passage of the United States-China Phase One Trade Agreement, signed in 2020, which aimed to promote structural reforms in Chinese trade, including intellectual property rights, technology transfer, and more. Thus, tariffs can be a powerful tool to leverage against nations using unfair trade practices, ultimately creating a healthier global marketplace.

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While tariffs can be beneficial, it is important to note that they must be applied carefully to avoid negative consequences. Overuse of a tariff or unfocused tariffs can lead to higher costs for consumers and retaliation from trade partners. For example, broad tariffs on imported goods can disproportionately increase prices for consumers, specifically those of low-income. Additionally, essential raw materials should not be tariffed because they can end up hurting domestic producers who rely on such items. To avoid these pitfalls, tariffs must be targeted to specific industries that genuinely need protection from foreign competitors, rather than across the board to minimize any potential harm to consumers. They should also be regarded as a short-term measure to help strengthen an industry rather than a long-term economic solution. Tariffs are beneficial when used to negotiate with trade partners into fairer practices, rather than as a punishment, which can instead hurt diplomatic relations.

Tariffs are simply an economic tool, which like any other economic tool, has varying efficacy based on its usage. When applied carefully, tariffs can strengthen a nation’s economy and help build a fairer global marketplace.

Anti

Hoping to achieve growth and stability, governments have historically shaped their countries’ economies through tools such as tariffs, sanctions, and trade agreements. Tariffs in particular have long been a popular economic instrument, with their usage being traced back to Ancient Greece and Britain in the Middle Ages. In the United States, tariffs have primarily been used as a protectionist measure—by increasing prices on imports, domestic industries are protected. Yet in today’s economy, the imposition of tariffs is more harmful than helpful as it discourages globalization and open trade, increases prices, and undermines jobs.

While tariffs refer to taxes levied on import or export goods, governments seldom impose them on exports because this often leads to a decrease in the competitiveness of their goods in the world market. Import tariffs raise the prices of goods produced by other countries, simultaneously increasing government funds and promoting domestic businesses and goods. But import tariffs have other more drastic, negative effects. In a globalized economy, free trade is an absolute necessity to ensure maximum economic efficiency. David Ricardo, an influential economist whose works later influenced Karl Marx and Thomas Robert Malthus, developed the widely accepted idea of comparative advantage, which explains how some countries are more efficient than others at producing certain goods. Thus, countries that have a comparative advantage in producing different goods can benefit greatly from trade, making their economies more efficient in the process. For example, the US finds it beneficial to import cell phones from China, where they are cheap to produce, while China imports US oilseeds. Import tariffs stand as an obstacle in the path to achieving such economic efficiency; when they are placed on goods from certain countries, the benefits of such trade arrangements are lost and these countries lose out on significant revenue from the nations imposing such tariffs. Furthermore, if one country imposes tariffs on another, the other country is likely to retaliate, setting off a trade war and weakening the economies of both. Import tariffs prevent countries from realizing the full benefits of free trade, hindering economic optimization for not only the countries imposing tariffs, but those affected by them as well.

The harmfulness of tariffs is further proven by the increase in consumer prices they cause. Increasing taxes on importers causes them to raise their prices to maintain their profits, ultimately forcing consumers to shoulder the increased tax burden. While raising prices on imported goods should in theory cause citizens to buy from domestic producers, oftentimes tariffs affect goods that aren’t in competition with domestic brands. For example, specialized goods that are imported in from other countries, like French artisanal cheeses and Persian rugs, may be subject to tariffs even when there are no close American equivalents. Additionally, according to findings by the United States International Trade Commission, the Section 232 steel and aluminum tariffs raised prices by 2.4% and 1.6%, respectively. While this may not appear to be a significant increase, even slight upticks in price can have significant impacts on our economy—steel and aluminum are valuable commodities that are used as inputs in a variety of industries, from the automobile market to the computer industry. Therefore, increases in the price of these commodities causes ripple effects throughout the economy, increasing prices for all related goods and services.

Proponents of tariffs claim that they increase domestic employment—since imports are more expensive, people will buy from domestic industries more often, increasing their profits and employment capabilities. However, the reality is that this is simply untrue; instead of increasing jobs, rising production costs force businesses to shrink their numbers instead. The Tax Foundation estimates that the 2018-2019 tariffs imposed by the then Presidential administration caused the loss of 142,000 full-time jobs, while economists believe up to 75,000 were lost due to the Section 232 tariffs. By increasing the cost of production in certain industries, tariffs decrease employment rates, a fact that starkly disproves the notion of economic protectionism that tariffs promise. It is abundantly clear that tariffs fail at achieving the job growth they promise, giving them virtually zero positive economic impact at all.

The general economic consensus is that tariffs do more harm than good. By driving down competitiveness, raising prices, and decreasing employment, tariffs have historically proven to be a nuisance rather than an aid. Even if administered for political purposes, the health of a nation’s economy is worth far more than sending a political message.

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About the Contributors

Anagha Nagesh, Assistant Editor

Anagha Nagesh is a current Opinion Assistant Editor and Political Columnist who joined the Hawkeye team in 2023 and editorial team in May 2024. Here at JP, she participates in Mock Trial, Theatre, Choir, Improv, Winter Cheerleading, and Research. Outside of school, she likes to swim, travel, and listen to Kanye.

Naomi George, Staff Writer

Naomi George is a current staff writer and joined the Hawkeye team in 2023. At JP, she participates in the track and cross country programs. Outside of school, she enjoys baking, reading, and spending time with her friends.

Aarna Wadhwa, Assistant Editor

Aarna Wadhwa is a current Assistant Art Editor who joined The Hawkeye team in 2023. At school she participates in clubs such as ACE and INK, while also playing softball. In her free time, she enjoys listening to R&B while painting with watercolors.