layman_economics on Nostr: Today, politicians talk a lot about tariffs. They say they want to protect ...

Today, politicians talk a lot about tariffs.

They say they want to protect entrepreneurs from their countries by taxing goods imported from other countries, giving their entrepreneurs a chance to be more competitive than foreign entrepreneurs.

But politicians like to omit one important fact.

Tariffs create more inequality.

Tariffs are good for big businesses, but deadly for small businesses.

That’s because a lot of imported goods aren’t consumer goods. They are ingredients businesses use to produce their goods (e.g. imported cocoa beans are used to make chocolate bars).

So, when these ingredients become more expensive (due to tariffs), big businesses can still afford them (because they have a lot of money) but small businesses can’t afford them (because they don’t have a lot of money).

So, small businesses go out of business while the big players keep playing the game.

Not only that, these big businesses can now claim the market share that once belonged to those small businesses.

This is the price we pay for tariffs, which the politicians conveniently choose to omit when they’re out in the public “selling” their tariff policies.

#economics #tariff #politicians