The Fallacy of Tariffs: How Tariffs Punish Domestic Consumers, Destroy National Industries, and Systematically Weaken National Competitiveness (Economic Self-Destruction Series)

This book radically and rigorously overturns the perception of tariff legitimacy through economic logic, with its core assertion directly targeting the essence of tariffs—they are by no means tools for external games, but systematic internal taxation on a country’s consumers, enterprises, and laborers, making them "the stupidest, most anti-economic, and most anti-consumer" institutional design. From the perspective of accounting principles and market laws, tariff burdens can never be borne by foreign enterprises. Instead, they will inevitably be shifted domestically through three paths: direct price increases, reduced product quality, and squeezed profits in the domestic supply chain, which completely violates the basic principles of corporate profit maximization and market equilibrium. In modern manufacturing with deeply intertwined global value chains, high tariffs are equivalent to imposing hidden production taxes on domestic enterprises. They push up procurement costs, weaken export competitiveness, and ultimately give rise to zombie industries lacking innovation motivation, rather than the so-called "strategic industry protection." For consumers, tariffs directly lead to higher prices, fewer choices, and systematic erosion of purchasing power, with low- and middle-income groups suffering the most. Meanwhile, tariffs trigger the transmission mechanism of imported inflation, acting as a self-accelerating inflation amplifier through the cost spiral from raw materials and intermediate goods to final products, suppressing investment and entrepreneurial vitality. In an innovative move, the book criticizes tariffs and domestic local protectionism within the same economic framework, clarifying that administrative borders cannot alter market laws—tariffs are essentially the international version of local protectionism. Both distort resource allocation, create redundant construction, and harm consumer interests. Their long-term existence stems from interest ties between bureaucrats and monopolistic groups, as well as political grandstanding, which is seriously inconsistent with the overall social interests. Addressing the fundamental flaw of old trade rules centered on national confrontation, the book proposes a new trade rule framework: taking consumer welfare as the highest goal, focusing on cost minimization and free resource allocation, and realizing positive-sum games based on comparative advantages. It emphasizes that free trade is not idealism, but the only sustainable path to economic activation. True national competitiveness stems from high efficiency rather than tariff protection, and openness and competition are the core driving forces of civilizational progress. In conclusion, every tariff increase is a betrayal of economic rationality, and every trade blockade is a collective punishment of consumers. A truly powerful country fears neither competition nor openness, and does not rely on tariffs to maintain dignity. Read more