Editing Tariff (section)

==Arguments favouring tariffs==

=== Protection against dumping ===
States resorting to protectionism invoke unfair competition or dumping practices:
* Monetary manipulation: a currency undergoes a [[devaluation]] when monetary authorities decide to intervene in the foreign exchange market to lower the value of the currency against other currencies. This makes local products more competitive and imported products more expensive (Marshall Lerner Condition), increasing exports and decreasing imports, and thus improving the trade balance. Countries with a weak currency cause trade imbalances: they have large external surpluses while their competitors have large deficits.{{Citation needed|date=November 2024}} For example, in 2010, [[Paul Krugman]] wrote that China pursues a mercantilist and predatory policy, i.e., it keeps its currency undervalued to accumulate trade surpluses by using capital flow controls. The Chinese government sells [[renminbi]] and buys foreign currency to keep the renminbi low, giving the Chinese manufacturing sector a cost advantage over its competitors. China's surpluses drain US demand and slow economic recovery in other countries with which China trades. Krugman writes: "This is the most distorted exchange rate policy any great nation has ever followed". He notes that an undervalued renminbi is tantamount to imposing high tariffs or providing export subsidies. A cheaper currency improves employment and competitiveness because it makes imports more expensive while making domestic products more attractive.<ref>{{Cite news |last=Krugman |first=Paul |date=2010-03-14 |title=Taking On China |url=https://www.nytimes.com/2010/03/15/opinion/15krugman.html |access-date=2024-11-01 |work=[[The New York Times]]}}</ref>
* Tax dumping: some [[tax haven]] states have lower corporate and personal tax rates.{{Citation needed|date=November 2024}}
* [[Social dumping]]: when a state reduces social contributions or maintains very low social standards. For example, in several U.S. states, labor regulations are considerably lax and the laws that do exist are barely enforced (if at all). Thus employers can force vulnerable, migrant children into factory work for a fraction of the cost of legal adult labor. These children are often injured or killed.<ref>{{Cite news |last=Dreier |first=Hannah |date=2023-02-25 |title=Alone and Exploited, Migrant Children Work Brutal Jobs Across the U.S. |url=https://www.nytimes.com/2023/02/25/us/unaccompanied-migrant-child-workers-exploitation.html |access-date=2025-01-31 |work=[[The New York Times]]}}</ref>
* [[Environmental dumping]]: when environmental regulations are less stringent than elsewhere. For example, the [[EU Carbon Border Adjustment Mechanism|European Union starts its carbon border-adjustment mechanism]] in 2026 to even the playing field with firms not subject to European carbon pricing.

===Protection of infant or ageing industries===
According to the economists in favour of protecting industries, free trade would condemn developing countries to being nothing more than exporters of raw materials and importers of manufactured goods. The application of the [[theory of comparative advantage]] would lead them to specialise in the production of raw materials and extractive products and prevent them from acquiring an industrial base. Protection of [[infant industries]] (e.g., through tariffs on imported products) may be needed for some developing countries to industrialise and escape their dependence on the production of raw materials.<ref name="Chang">{{cite conference |url=https://www.cepal.org/prensa/noticias/comunicados/8/7598/chang.pdf |title=Infant Industry Promotion in Historical Perspective{{snd}} A Rope to Hang Oneself or a Ladder to Climb With? |author=[[Ha-Joon Chang]] (Faculty of Economics and Politics, University of Cambridge) |date=2001 |conference=Development Theory at the Threshold of the Twenty-first Century |location=Santiago, Chile |publisher=[[United Nations Economic Commission for Latin America and the Caribbean]] |access-date=2021-05-13 |archive-date=2021-03-08 |archive-url=https://web.archive.org/web/20210308192131/https://www.cepal.org/prensa/noticias/comunicados/8/7598/chang.pdf |url-status=dead}}</ref><ref>{{Cite news |title=International trade - Arguments for and against interference |url=https://www.britannica.com/topic/international-trade/Arguments-for-and-against-interference |url-status=live |archive-url=https://web.archive.org/web/20200603024245/https://www.britannica.com/topic/international-trade/Arguments-for-and-against-interference |archive-date=2020-06-03 |access-date=2020-05-03 |newspaper=Encyclopedia Britannica}}</ref>

Economist [[Ha-Joon Chang]] argued in 2001 that most of today's developed countries have developed through policies that are the opposite of [[free trade]] and [[laissez-faire]] such as interventionist trade and industrial policies to promote and protect infant industries. In his view, Britain and the United States have not reached the top of the global economic hierarchy by adopting free trade. As for the East Asian countries, he argues that the longest periods of rapid growth in these countries do not coincide with extended phases of free trade, but rather with phases of industrial protection and promotion. He believes infant industry protection policy has generated much better growth performance in the developing world than free trade policies since the 1980s.<ref name="Chang" />{{Undue weight inline|date=November 2024|reason=Cited 11 times, may be outdated}}

In the second half of the 20th century, [[Nicholas Kaldor]] takes up similar arguments to allow the conversion of ageing industries.<ref>{{cite book |url=https://books.google.com/books?id=qVfhDgAAQBAJ&q=nicholas+kaldor++free+trade&pg=PT24 |title=Free Trade: Myth, Reality and Alternatives |author=Graham Dunkley |date=2013 |publisher=Zed Books |isbn=9781848136755}}</ref> In this case, the aim was to save an activity threatened with extinction by external competition and to safeguard jobs. Protectionism must enable ageing companies to regain their competitiveness in the medium term and, for activities that are due to disappear, it allows the conversion of these activities and jobs.

===Free trade and poverty===
In an [[op-ed]] article for ''[[The Guardian]]'' (UK), [[Ha-Joon Chang]] argues that economic downturns in Africa are the result of free trade policies,<ref name="theguardian.com">{{cite news |url=https://www.theguardian.com/commentisfree/2012/jul/15/africa-industrial-policy-washington-orthodoxy |title=Africa needs an active industrial policy to sustain its growth |first=Ha-Joon |last=Chang |date=15 July 2012 |access-date=14 April 2019 |newspaper=The Guardian |archive-date=29 November 2018 |archive-url=https://web.archive.org/web/20181129130744/https://www.theguardian.com/commentisfree/2012/jul/15/africa-industrial-policy-washington-orthodoxy |url-status=live}}</ref><ref name="newtimes.co.rw">{{cite web |author=<!--Not stated--> |url=http://www.newtimes.co.rw/section/read/202574 |title=Why does Africa struggle to industrialise its economies? &#124; The New Times &#124; Rwanda |publisher=The New Times |date=2016-08-13 |access-date=2019-10-07 |archive-date=2020-06-07 |archive-url=https://web.archive.org/web/20200607031858/https://www.newtimes.co.rw/section/read/202574 |url-status=live}}</ref> and elsewhere attributes successes in some African countries such as [[Ethiopia]] and [[Rwanda]] to their abandonment of free trade and adoption of a "developmental state model".<ref name="newtimes.co.rw"/>

Some commentators argue that poor countries and regions that have succeeded in achieving strong and [[sustainable growth]] are those that have become [[mercantilism|mercantilists]], not free traders: China, South Korea, Japan, Taiwan.<ref>{{cite web |last=Krugman |first=Paul |date=31 December 2009 |title=Blog: Macroeconomic effects of Chinese mercantilism |url=https://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/ |url-status=live |archive-url=https://web.archive.org/web/20200330031741/https://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/ |archive-date=30 March 2020 |access-date=14 June 2023 |work=[[The New York Times]]}}</ref><ref>{{cite web |last=Pham |first=Peter |date=March 20, 2018 |title=Opinion: Why Do All Roads Lead To China? |url=https://www.forbes.com/sites/peterpham/2018/03/20/why-do-all-roads-lead-to-china/ |url-status=live |archive-url=https://web.archive.org/web/20230503024727/https://www.forbes.com/sites/peterpham/2018/03/20/why-do-all-roads-lead-to-china/ |archive-date=2023-05-03 |access-date=2023-06-14 |website=Forbes}}</ref><ref>{{cite web |last=Subramanian |first=Arvind |date=January 25, 2011 |title=Opinion: Learning from Chinese Mercantilism |url=https://piie.com/commentary/op-eds/learning-chinese-mercantilism |url-status=live |archive-url=https://web.archive.org/web/20230430024010/https://www.piie.com/commentary/op-eds/learning-chinese-mercantilism |archive-date=30 April 2023 |access-date=14 June 2023 |website=[[Peterson Institute for International Economics]]}}</ref><ref>{{cite web |author=Professor Dani Rodik |date=June 2002 |title=After Neoliberalism, What? |url=http://drodrik.scholar.harvard.edu/files/dani-rodrik/files/after-neoliberalism-what.pdf |url-status=live |archive-url=https://web.archive.org/web/20170214104123/http://drodrik.scholar.harvard.edu/files/dani-rodrik/files/after-neoliberalism-what.pdf |archive-date=2017-02-14 |access-date=2018-09-29}}</ref>

The 'dumping' policies of some countries have also largely affected developing countries. Studies on the effects of free trade show that the gains induced by WTO rules for developing countries are very small.<ref name=Gains>{{cite journal |last1=Ackerman |first1=Frank |title=The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections |journal=Research in Agricultural and Applied Economics |series=Working Paper No. 05-01 |date=2005 |doi=10.22004/AG.ECON.15580 |s2cid=17272950}}</ref> This has reduced the gain for these countries from an estimated {{US$|long=no|539 billion}} in the 2003 LINKAGE model{{Further explanation needed|date=November 2024}} to {{US$|long=no|22 billion}} in the 2005 GTAP model. The 2005 LINKAGE version also reduced gains to 90 billion.<ref name=Gains/> As for the "[[Doha Round]]", it would have brought in only {{US$|long=no|4 billion}} to developing countries (including China...) according to the GTAP model.<ref name=Gains/> However, it has been argued that the models used are actually designed to maximise the positive effects of trade liberalisation, that they are characterised by the absence of taking into account the loss of income caused by the end of tariff barriers.<ref>{{cite web |url=http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r489.pdf |title=Computational Analysis of Multilateral Trade Liberalization in the Uruguay Round and Doha Development Round |date=December 8, 2002 |author=Drusilla K. Brown |author2=Alan V. Deardorff |author3=Robert M. Stern |author-link2=Alan Deardorff |access-date=November 18, 2018 |archive-date=September 22, 2017 |archive-url=https://web.archive.org/web/20170922013707/http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r489.pdf |url-status=live}}</ref>

===Trade deficits===
The notion that bilateral [[Balance of trade|trade deficits]] are per se detrimental to the respective national economies is overwhelmingly rejected by trade experts and economists.<ref>{{Cite news |title=Analysis: Trump rails against trade deficit, but economists say there's no easy way for him to make it go away |url=https://www.washingtonpost.com/news/wonk/wp/2017/03/07/trump-rails-against-the-trade-deficit-but-economists-say-theres-no-easy-way-for-him-to-make-it-go-away/ |access-date=12 March 2017 |newspaper=Washington Post}}</ref><ref>{{Cite news |title=Trump warns of trade deficits. Economists say, who cares? |url=https://www.pri.org/stories/2017-03-01/trump-warns-trade-deficits-economists-say-who-cares |access-date=2017-10-17 |work=Public Radio International |language=en-US}}</ref><ref>{{cite web |title=Trade Balances |url=http://www.igmchicago.org/surveys/trade-balances |access-date=2017-10-27 |website=www.igmchicago.org}}</ref><ref>{{Cite news |date=2018-06-09 |title=What Is the Trade Deficit? |url=https://www.nytimes.com/2018/06/09/upshot/what-is-the-trade-deficit.html |access-date=2018-06-10 |work=The New York Times |language=en-US |issn=0362-4331}}</ref>