Generally speaking, economists and other freedom-lovers who oppose tariffs do so because of the costs imposed on all consumers taken together. Tariffs interfere with the enormous gains from trade that we all enjoy and blunt incentives to specialize and produce the things that we can produce best and most simply. In short, they make the average citizen poorer.
That’s problematic enough. But when a tariff program is administered by politicians who can pick industrial winners—which also means picking losers by omission—the potential costs to the economy become even more crippling. We pay higher prices for consumer goods, and get less of them. And we get a politically entangled, less-vibrant economy and a sad case of economic hardening of the arteries.
The U.S. government has been keeping foreign trade statistics since 1790. In the majority of years, the U.S. ran a trade deficit and an offsetting capital surplus (meaning more money was invested in the U.S. than U.S. companies and individuals invested in the rest of the world). The U.S., by productively using inexpensive foreign capital, was able to create the world’s biggest and wealthiest economy.