Part 5/7:
Historical Context of Tariffs
Historically, tariffs played a significant role in financing the government before the establishment of income taxes. Early American economic strategies heavily relied on tariffs, which provided necessary revenue. While those days have shifted with changes in fiscal policy, the principle remains that tariffs serve as a key component of trade relations.
Nonetheless, the landscape of global trade has evolved, leading to skewed perspectives on the efficacy of tariffs. While tariffs can be helpful in protecting nascent industries, excessive or mismanaged tariffs can yield unintended consequences on prices and market dynamics.