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Tariffs protect domestic companies against competition from more innovative foreign companies. Because they remove incentives for domestic companies to improve
by jaredklewis 2y ago
Tariffs protect domestic companies against competition from more innovative foreign companies. Because they remove incentives for domestic companies to improve their products or reduce their prices, tariffs gradually reduce the competitiveness of domestic firms; the longer and higher the tariffs, the more likely domestic industries are to turn into rent extractors, only able to sell their products because foreign competition has been handicapped.
If a country wants to have globally competitive, innovative companies, that is not compatible with tariffs.
- allknowingfrog 2y agoTo be fair, some of this "innovation" is just a lack of environmental regulations and human safety standards.
- bombcar 2y agoThis is a huge, huge part of it. Tariffs on high-tech electronic devices and tariffs on steel are different beasts. We're rightfully appalled at companies that literally grind up employees - but we happily buy from companies in countries where that's just Tuesday. https://www.washingtonpost.com/business/interactive/2025/osha-workplace-deaths-safety-sawmill/?tid=ptv_rellink https://www.washingtonpost.com/business/interactive/2025/osh...
- jaredklewis 2y agoThat’s a good point. I could maybe imagine supporting tariffs that were legitimately tied to these goals. For example, if there was a tariff against a particular industry in a particular country that would be dropped the moment that the country in question implemented some environmental regulation. The danger is even if tariffs are implemented for good reasons, they still incentivize domestic firms to just become rent extractors.
- rasz 2y agoCounter example : Tata, current owner of Land Rover.