Tariffs: A Double-edged Sword!

The US is the largest closed economy in the world next to Brazil as we have enough agricultural production, natural resources, and diversity in the economy to stop trading with the rest of the world for decades. This, however, isn't an ideal scenario as trade results in increased competition within national markets and lowers prices for all consumers. Tariffs are a tax on consumers that are used by governments worldwide to slow spending and as a short-term economic tool for increased diplomacy and over the long term as a diplomatic weapon. They can hurt the GDP and GNP of the country that the tax is placed against, but this has historically been shown to be minimally successful. In general, tariffs hurt the poorest people in countries that use them as well as the countries that they are placed in and have resulted in horrific outcomes in the past, i.e., WWII. The natural response to tariffs from governments is retaliatory tariffs, which hurt both governments using them and the people that they represent. For capitalistic economies, there is less of an impact as governments don't provide massive entitlements to the people and, therefore, can play the tariff game longer. Tariffs and reciprocal duties can cause socialistic governments to become insolvent very quickly. In all types of economies, they lead to a lack of competition, innovation, and price gouging at the domestic level. Free trade in combination with small point-of-sale taxes is ideal as it allows for increased choice within markets, more economic activity, and all people within a nation, especially the poor, to have a higher standard of living. Tariffs are necessary for nations as their trading partners may be using export tariffs on goods that leave their countries, e.g., China and the Chinese Communist Party, to raise funds to increase government, engage in large-scale economic projects, and militarize. This is a concern, and nations that are receiving these imports should be mindful of this. The reality is that with blockchain technology, cryptograph