If economists all say tariffs are bad for the economy, why do we have them?

Answer by  spottygao (42)

Special interest groups (agriculture, car manufacturers) lobby hard for tariffs since they give them enormous benefit. Wider groups (especially consumers) lose out but to smaller degree, making them less likely to put pressure on politicians. Only economists can visualise the deadweight loss with their fiendish diagrams!

Answer by  Alereon (44)

Tariffs are taxes on goods when they enter a country. They are designed to increase the price of foreign goods relative to domestic goods, encouraging consumers to buy domestic.

Answer by  uttony (14)

Most domestic workers believe tariffs protect their jobs. Tarrifs get voted in by politicians who know that they can get many more votes from domestic workers than from economists.

Answer by  Gabriel (2146)

Not all economists say that. Tariffs can be useful for balancing trade deficits. In a perfect economy, they would be unnecessary.

Answer by  waskasoo (471)

Tariffs greatly help small sectors of the economy at the expense of the entire economy overall. So, for political reasons, there is an incentive to help certain groups with tariffs.