Per this WSJ article, tariffs before the Civil War were about raising revenue.
After the Civil War, tariffs were put in place to protect U.S. manufacturers.
From the Great Depression, onward, tariffs began to be used as a tool to negotiate lower tariffs and encourage global trade.
Now, tariffs are being used as a Cold War tool against China, fearing that China manufactures too much and are being used to cut off access to products made in China – resulting in both higher tariff fees and higher prices paid by American consumers. (These tariffs are not – yet – being instituted by other countries – so this mostly hurts American consumers.)
It is not clear that the “costs” of tariffs on China-based products will result in greater benefits to Americans. Tariff costs are borne especially by lower income Americans, plus they enable U.S. makers to be less efficient and less innovative. Further, China will respond by enacting tariffs on U.S. made goods sold in China. No one wins except for some U.S. manufacturers who get to remain inefficient and take wind fall profits by no longer having to compete with more efficient producers.
Tariffs are, in another way, a centrally planned economy – where politicians and technocratic bureaucrats decide who makes what and at what price.
Tariffs Are More Than Just Taxes. They Are a Tool of Geopolitics. – WSJ
