Company News
Tariff （part one）
*May 8, 2025*
1、Historical Origins of Tariffs
Tariffs have a long history and were once a primary source of fiscal revenue for most nations. The earliest surviving tariff records are preserved in Palmyra, an ancient city in the Syrian desert. Inscriptions on the walls of the city’s customs office detail taxes levied on slaves, goods, dyed wool, perfumed oils, foodstuffs, and other items crossing its borders.
The English term "tariff" originates from the French word "tarif" (meaning "to set prices"), which itself derives from the Italian "tariffa" (referring to a "price list" or tax schedule). This medieval Latin root entered the Western lexicon through interactions with Turkic peoples, tracing back to the Ottoman Turkish term "taʿrife" (a "price list" or "tariff schedule"). The Turkish term, in turn, stems from the Persian "taʿrefe" ("fixed price" or "receipt"), ultimately rooted in the Arabic "taʿrīf" ("notification," "definition," or "announcement").
2、Evolution of Tariff Policies
After the 15th-century Age of Exploration, European powers expanded overseas trade, shifting wealth accumulation from feudal land-based systems to precious metals. This transition spurred mercantilist tariff policies aimed at maximizing gold and silver reserves.
In the Americas, colonial resistance to British differential tea tariffs culminated in the Boston Tea Party (1773), a catalyst for the American Revolution. Influenced by Alexander Hamilton’s protectionist doctrines, the newly independent United States adopted high tariffs from George Washington’s presidency through Harry Truman’s post-WWII era. Notable examples include the infamous Smoot-Hawley Tariff Act (1930), which exacerbated the Great Depression. While tariffs historically bolstered state revenues, their fiscal importance has declined with globalization and the rise of alternative revenue sources.
Modern Challenges:
While tariffs protect domestic production, globalization has exposed their drawbacks, particularly in distorting employment and resource allocation. Static analysis reveals that tariffs misallocate resources by favoring inefficient domestic production over imports.
3、Economic Analysis by Country Type
| Country Type | Characteristics | Welfare Impact |
| Small, Low-Efficiency | Low consumption and inefficient production (relies on imports). | Consumer surplus loss splits into: |
| Large, Low-Efficiency | High consumption but inefficient production (primarily imports). | If tariff revenue (S) from foreign producers exceeds (b + d), net gains arise. Optimal tariff occurs at S = b + d, balancing protection and efficiency. |
| Small, High-Efficiency | Low consumption but highly efficient production (exports dominate). | Export tariffs may benefit the nation if importing countries impose tariffs. Strategic export taxes can counteract foreign trade barriers. |
| Large, High-Efficiency | High consumption and efficiency (may be net exporter or importer). | Complex dynamics due to market size. Export tariffs can enhance national welfare under specific conditions. |
4、Contemporary Relevance
Tariffs remain a double-edged sword. While they protect industries and generate revenue, excessive use disrupts global supply chains and inflates consumer costs. For instance, the 2025 U.S.-China tariff escalation (up to 157% on Chinese goods and 125% on U.S. imports) has near-halted bilateral trade, illustrating modern geopolitical weaponization of tariffs. Conversely, regional agreements like RCEP and CPTPP promote tariff reductions, reflecting a dual trend of protectionism and liberalization.
