While domestic industries sheltered by tariffs can benefit, the broader economic ramifications often lead to increased costs for consumers and significant challenges for businesses reliant on imports or exports, i.e. the approach will backfire.

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It is important to realize that what those benefited by these measures (tariffs) consider an advantage for themselves lasts only for a limited time. In the long run the privilege accorded to a definite class of producers loses its power to create specific gains. The privileged branch attracts newcomers, and their competition tends to eliminate the specific gains derived from the privilege. Thus the eagerness of the law’s pet children to acquire privileges is insatiable. They continue to ask for new privileges because the old ones lose their power.

Ref/

The Austrian economist Ludwig von Mises (1881-1973) argued in Human Action that those granted the political privilege of tariff protection enjoyed a boon that would be short lived as the gains would be competed away by new entrants. His most extensive treatment of tariffs therefore occurred in a chapter on “Liberal Foreign Policy” where he stressed the mutual benefits of a peaceful international trading system. In this quotation Mises argues that tariffs are a political privilege granted to a minority of interests but warns that the “boon” they got from the government would be short lived as internal competition by upstarts in the protected industry would gradually compete away those benefits.

The EU will be strongly affected by US tariffs, especially its auto industry.