Since tariffs distort trade there is no such thing as the optimal tariff.

Question

Quizplus · Accepted Answer

The concept of an "optimal tariff" is based on the idea that a country can improve its economic welfare by imposing a tariff rate that maximizes the difference between the benefits it receives from tariffs (such as increased domestic production and government revenue) and the costs tariffs impose (such as higher prices for consumers and potential retaliation from trade partners). This concept acknowledges that while tariffs can distort trade, there can be a specific rate that optimally balances these effects.

Since Tariffs Distort Trade There Is No Such Thing as the Optimal