The Economics of Tariffs*

2026

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AI-generated summary

1) Tariffs, while seemingly simple, are complex economic tools that can distort trade, impact national welfare, and redistribute income, with significant implications for global economic policy.
2) This paper synthesizes theoretical and empirical research on the economics of tariffs, covering their general equilibrium effects, welfare implications, and the arguments for their use. It also examines recent empirical evidence on U.S. tariffs.
3) The paper explores the trade-offs between deadweight welfare losses and terms of trade improvements, the role of tariffs in large versus small countries, and the political economy behind tariff decisions.
Tags: tariffs, trade, economics, welfare, policy

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