Seriously, When Will The Guardian Learn Some Economics?

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The Guardian tries its hand at an explainer about trade and tariffs. And, as we would expect when the newspaper tries to deal with matters economic it manages to stare reality in the face and then whiff it. Tariffs end up being paid by the consumers inside the tariff barriers. There’s nothing very complicated about this, it’s entirely standard economics and well explained in absolutely every single economics book on the damn planet.

Meaning, of course, that The Guardian misses it:

What is a tariff?
Tariffs are border taxes charged on foreign imports. Importers pay the applicable charges at the point of entry to the customs agency of the country or economic bloc imposing them.

Rather than being used to raise revenue, they are imposed to increase the price of foreign goods in order to make domestic produce comparatively cheaper, with the aim of encouraging domestic production by protecting local firms from global competition. According to tariff supporters, this can help to save jobs that might otherwise go overseas.

Importers do cough up the cash, of course they do, in that first instance. But this makes, as they say, foreign goods more expensive. Domestic prices will also rise as a consequence – we only need to look at the divergence of US steel prices from global just recently to grasp this.

The prices domestic consumers pay rise as a result of tariffs. Who thus pays the tariffs? Domestic consumers.

And if you’re going to have an explainer about tariffs this might be a useful thing to tell people, no? Assuming, as we cannot about The Guardian, that you’ve grasped the basics of this economics stuff in the first place.

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TD
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TD

The Guardian doesn’t approve of economics and would advocate its abolishment as it thinks it’s just people acting badly.

Spike
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Of course the explanation stops here, as the essence of Guardian economics is selecting businesses for punishment so that the consumer escapes any discomfort.

jgh
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jgh

A few days ago there was an article about people on an economics course complaining that “economics should be about how to do X,Y,Z” and “what gives them the right to make the rules?”. Presumably, the Grun also demands that meteorology “should be” about how to make the weather do what they want it to do rather than in actual fact *OBSERVING* what the weather *DOES* and formulating rules to explain the observed phenomona. How *DARE* Isaac Newton define rules of gravity, scientists should be telling gravity to stop making poor people heavy. Typically, the comments section was closed within… Read more »