Tariffs and industrial policy

A tariff is a tax on your own consumers paid to defend your own producers. Whether that's smart depends entirely on which producers and over what time horizon — i.e. it is a political choice, not an economic one.

Tariffs and industrial policy are quietly running in semiconductors, energy, biotech, and defense across every major economy. Textbooks often insist this can't work; the empirical record suggests it's the rule, not the exception, at least for strategic sectors.

Domestic consumers

pay more

Government

collects revenue

Domestic producers

earn more

Foreign producers

sell less