It is difficult to dislodge entrenched special interests. Taxpayers bear the costs of subsidy payments. Trade restrictions limit world trade, diminish economic efficiency, reduce total production and employment, raise prices, and encourage retaliation. They benefit some domestic companies and their workers at the expense of foreign companies and workers, and domestic consumers. While subsidies benefit some domestic companies and workers in exporting industries, tariffs reduce exports.
Tariffs shift resources and production from more effective to less effective producers.
Arguments used to support trade restrictions include the infant industry argument and the national security or strategic industry argument. Apply arguments in favor of and against tariffs to the debate situation. Evaluate the arguments presented in the debate. Analyze the costs and benefits of instituting a tariff.