“More trade has real costs, but the benefits are vastly greater. For rich countries, the benefits outweigh costs 7x. For the world's poorer half, benefits are an astounding 95x higher” - Bjorn Lomborg
The urge to charge tariffs is understandable. Unless you’ve really thought about it. Then you establish that tariffs breed inefficiency. They mean a factory that can produce a microchip with X inputs cuts back and one that produces that same microchip (or an inferior one) with X plus 3 inputs grows or gets built.
There may be a political reason to limit trade. We might well want to avoid trading with an adversary or a nation set on stealing patents or disrupting our culture.
We also see that trade is a force for peace. The US and China have many reasons to fight. But imagine the disruption to trade - ie prosperity. China invading Taiwan would disrupt AI but all but halting production of new chips. The economic consequences are unthinkable.
When we specialise, compete and trade, everyone wins.
This study finds that “free trade leads to substantial net benefits globally, generating US$ 700 billion in benefits (0.83% of global GDP) and US$ 100 billion in costs (0.12% of global GDP) in the first year, a differential that grows over time.”