Why do so many countries have tariffs?

Over at the Center Square, Iain Murray and I ask an overlooked question: If tariffs are so bad, then why does nearly every country have them? We give a multi-part answer.

One political answer is the old story of concentrated benefits and diffuse costs, where a single industry reaps large benefits from millions of people, who may not even notice the few dollars per year they each lose.

Another is the infant industry argument, where industries refuse to grow up, so they can keep tariff barriers up as long as they can.

Human nature also plays a role, through what economists call anti-foreign bias. Humans naturally distrust outsiders.

Put these three together, and you go a long way towards explaining why nearly every country has tariffs. But Iain and I end on a hopeful note, first played by Adam Smith:

But trade and cooperation are every bit as ingrained in human nature. There is evidence of long-distance trade from man’s early prehistory. Adam Smith (1723-1790) was right when he called humans an animal that trades.

One of the greatest achievements of the post-World War II consensus was the recognition that trade barriers hurt everyone. It may be that we need to relearn that lesson through self-harm. If other countries sabotage themselves with tariffs, that’s hardly a justification to do likewise.

Read the whole thing here. For more on Adam Smith’s views on trade, see the CEI essay collection Adam Smith’s Guide to Life, Loveliness, and the Modern Economy.