The Failure of Tariffs

If a politician tells you that tariffs will make a lot of money for the government, he's telling you that tariffs don't work.

What?

Here's why. A tariff is a sales tax on foreign goods. This tax is paid by American companies when they import products from other countries, and then it's passed on to the consumer.

The purpose of the tariff (sales tax) is to make imported items so expensive that people will stop buying them. If the tariff works, people stop buying those things. When they stop buying the things, the things are no longer coming into the country, and so there is no tariff to pay.

If tariffs are still being paid, it means the goods are still being imported, because the tariff didn't get people to stop buying those items. A tariff that continues to bring in lots of money is a tariff that failed to stop the influx of foreign goods.

So, the politician who tells you that tariffs will provide the government with an ongoing stream of billions of dollars is a politician who is telling you he already expects -or plans - for his tariffs to fail.