Resolved: Tariffs harm domestic and foreign economies.

Thanks, Con!What is a tariff and what about it hurts economies? The tariff is the chief means of protectionism, a policy that discriminates between domestic and foreign goods and services. Protectionism contrasts sharply with free trade, a policy that allows consumers to buy from abroad just as easily as they can buy goods domestically. A tariff is a tax levied upon goods as they crioss national boundaries, usually by the government of the importing country. [1] It is a special levy that consumers in the home economy are forced to pay to buy goods made abroad. In practice, the tariff is reflected in a higher price for domestic consumers; the consumers don't see the tariff, they just see the higher price, and choose their purchasing decisions based on that higher price: usually less consumption, which means less revenue for foreign companies. So the two main evils are higher prices for domestic consumers and loss of business for foreign producers. That is without taking into account retaliatory tariffs, which I'll go into later.Tariffs hurt domestic economiesWhen a tariff is levied upon a foreign good imported into a domestic economy, the consumers see a higher price. The response to this fact is for supporters of tariffs to say that, "the domestic country will account for this, right?" "They will start producing more by themselves, and as a result be an isolationist utopia!" Sorry, that's not how it has worked in theory or in practice. In theory, the tariff causes a deadweight loss in the economy, which is a cost to society caused by government programs, externalities, monopolies, or other market inefficiencies, in this case namely tariffs. [2] A country suffers a net national loss with tariffs, and benefits without them. In theory, without these tariffs, countries benefit from trade through what's known as absolute and competitive advantage; these terms indicate when a country is by far more efficient at producing a good than another country, and by sticking with goods and services that country is better at doing, through trade, every party is made better off. [3] In practice, tariffs have hurt domestic consumers through higher prices, hurt domestic producers with higher materials costs, and exacerbated depressions. If protectionism in the form of tariffs really was a good idea, then why not raise the tariffs to 100% or 150% on all foreign goods? Surely the highest protectionist tariff would be the most beneficial, right? Wrong. The highest tariff in US history was the Hawley-Smoot Tariff, which was passed into law during the Great Depression, and as a result of its passing with Hoover's signature resulted in a severe US trade drop, an intensified depression, and retaliatory tariffs from abroad. [4] Everybody, moreover, is harmed by the general drop in the productivity of labor which the shifting of industries from more favorable to less favorable locations brings about, which leads me into the next contention. [5] Tariffs hurt foreign economiesWhen a domestic economy levies a tariff on a good or service that domestic consumers want to buy, it hurts the foreign economy exporting the good or service. The reason is simply a loss in volume of sales: the higher a price increases, the less quantity of that good will be consumed. [7] So the higher a tariff increases, the less wealth being created between the two countries, and the worse everybody is overall. The foreign economy loses business and has to close factories and manufacturing facilities to account for the drop in sales. Levying a tariff on a foreign economy is essentially a slap in the face. As a result of this "economic warfare," the foreign country may impose a retaliatory tariff which harms their economy as described before. Free trade makes everyone better off. [6]Thanks,-WSA[1] http://www.britannica.com... [2] http://www.mhhe.com...[3] http://www.sparknotes.com...;[4] http://www.infoplease.com...[5] http://www.thefreemanonline.org...[6] http://www.britannica.com...[7] http://www.socialstudiesforkids.com...