The historian, poet, and Whig politician Thomas Babington Macaulay (1800–1859) once observed, “Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.”

Today, we see a perfect illustration of this idea, as free trade has found critics on both ends of the political spectrum. Vermont Senator Bernie Sanders, an extreme leftist, declares that America must “fight to end the disastrous unfettered free trade agreements.” At the same time, former President Donald Trump, a right-wing Christian nationalist, has praised tariffs, claiming that “A tariff is a tax on a foreign country. A lot of people like to say it’s a tax on us. No. It is a tax that doesn’t affect our country.”

However, despite Trump’s assertion, a tariff is not a tax on foreign nations. A tariff is a tax imposed on imported goods, and it’s not paid by the country of origin. Instead, it is paid by the importers, who then pass this cost on to the consumers by raising prices on the goods they sell. That means that, in practice, it’s the local consumers who bear the burden of tariffs, not foreign countries. This pattern is true in every nation around the world.

The primary purpose of a tariff is to drive up the cost of imported goods, making it easier for local producers to charge higher prices for their own products without being undercut. This protects domestic industries, particularly those with political connections, by insulating them from competition. Unfortunately, this comes at the expense of consumers, especially those with lower incomes.

As The Atlantic writer David Frum pointed out, tariffs disproportionately punish lower-income individuals because they are often applied to lower-priced, mass-market items. Meanwhile, luxury goods are either taxed at lower rates or not subject to tariffs at all. Even if tariffs were applied equally across the board, the impact would still be regressive because the wealthier you are, the smaller portion of your income you spend on goods that are affected by tariffs.

Another common argument in favor of tariffs is that they protect “local jobs,” but while some jobs are saved, others are inevitably lost. The Brookings Institution studied Trump’s tariffs and reported that “Trump’s tariffs have helped some workers and hurt others. Nothing is particularly surprising about this; trade policy almost always has important distributive effects, and any change in trade policy is a choice to benefit some groups at the expense of others. Yet, overall, when economists have attempted to add up the net effect of Trump’s tariffs on jobs, any gains in importing-competing sectors appear to have been more than offset by losses in industries that use imported inputs and face retaliation on their foreign exports.”

When economists try to calculate the overall effect of Trump’s tariffs on jobs, they find that any gains in industries competing with imports are more than offset by losses in sectors that rely on imported materials and in industries facing retaliatory tariffs on their foreign exports.

Even in cases where tariffs have “created” jobs, the cost of doing so has been astronomical. Brookings looked at tariffs on washing machines that were supposed to protect American manufacturing jobs. They found that the cost to consumers amounted to $817,000 for every job that was saved. That’s money that consumers would have spent on other things, creating more jobs elsewhere in the economy than the tariffs did. Meanwhile, Moody’s estimated that a 10% tariff in the U.S. would destroy 2.1 million jobs and shrink the economy by 1.7%. In short, tariffs make everyone worse off.

The International Monetary Fund (IMF) has also sounded the alarm on the dangers of tariffs, warning that such policies are harmful to both rich and poor economies alike. IMF economist Maurice Obstfeld wrote, “What proponents often fail to realize is that such tariff policies, while certainly hurting their targets, can also be very costly at home.” Obstfeld further observes, “And surprisingly, the self-inflicted harm can be substantial even when trade partners do not retaliate with tariffs of their own.”

Economies are interconnected, with jobs depending on goods for local consumption, exports, and imports alike. While a politically connected local producer might use tariffs to increase profits and may even share some of those profits with employees, there is no guarantee this will happen. What is certain is that jobs tied to imports will be lost.

Tariffs rarely stop at merely raising prices on foreign goods. More often than not, when one country imposes tariffs on another, the situation escalates into a trade war. In retaliation, the targeted country will slap tariffs on goods from the nation that initiated the economic conflict. This makes it more expensive to export goods to that country, driving down demand. With less demand for its products abroad, a country’s production decreases, which leads to fewer jobs in the exporting sectors.

Maurice Obstfeld has criticized such policies, pointing out that trade policies designed to gain an artificial export advantage “are a legitimate topic for international consultation and peer pressure. In some cases, unilateral retaliation is sanctioned by WTO rules. But those who promote ‘getting tough’ with foreign trade partners through punitive tariffs should think carefully. It may be emotionally gratifying and boost specific industries; the threat may even frighten trade partners into changing their policies; but, ultimately, if carried out, such policies cause wider economic damage at home.”

There is one silver lining for developing nations: they can learn from the mistakes of others. Tariffs have long been shown to be a major error, and any country that wishes to create jobs and build a thriving economy should avoid them entirely.