Replies

If you haven't seen, and are interested, here's information on Wealth of Nations and Smith's views on tariffs:

In 'An Inquiry into the Nature and Causes of the Wealth of Nations', Adam Smith envisioned a world of small local businesses run by the owner, and the employees of these businesses.

Adam Smith listed the following conditions to impose tariffs:

Book IV, Chapter II, 'Of Restraints Upon Importation From Foreign Countries of Such Goods as Can Be Produced at Hone':
"As there are two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, so there are two others in which it may sometimes be a matter of deliberation, in the one, how far it is proper to continue the free importation of certain foreign goods; and, in the other, how far, or in what manner, it may be proper to restore that free importation, after it has been for some time interrupted."

1.When the industry is necessary for national defense. Smith uses the example of the navy and shipping.
"The first is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping."

2. When domestic production is subject to an internal tax which makes it more difficult to sell domestic products compared to foreign products.
"The second case, in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, is when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former."

3. When a nation to whom one exports, imposes a tariff on one’s exports.
"The case in which it may sometimes be a matter of deliberation how far it is proper to continue the free importation of certain foreign goods, is when some foreign nation restrains, by high duties or prohibitions, the importation of some of our manufactures into their country. Revenge, in this case, naturally dictates retaliation, and that we should impose the like duties and prohibitions upon the importation of some or all of their manufactures into ours. Nations, accordingly, seldom fail to retaliate in this manner
. . .
The short term increase cost of goods, will be offset by long term advantages. There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods."

4.Smith also argued that when tariffs are repealed, it should be done slowly.
"Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home market, as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable."