In the potential tariff war between China and the United States, each state is choosing to protect different sectors. Which is right? And is there a way for a country to engage in “good” protectionism for its own interests?
First off, economists in general agree that tariffs should be avoided because they bring costly trade-offs. If a country taxes imported sneakers, for instance, it helps domestic shoemakers but deprives shoe buyers of the best, low-price kicks.