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Behind the Veil of Tariff Fixation
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Trade Publication Article
Behind the Veil of Tariff Fixation
2025
Overview
Because a country's internal imbalances between consumption and production must always be consistent with its external imbalances, anything that affects the former must affect the latter, and vice versa. Whether through a tariff, a tax subsidy, or a wage-suppressing labor law, the result is a change in the internal distribution of income that also has external implications. Similar effects can be seen in poli cies that encourage environmental deg radation (by increasing business prof itability at the expense of health care costs), restrict labor from organizing, hold down minimum wages, or reduce the bargaining power of workers.
Publisher
International Monetary Fund
