What a Tariff Does

There is more to tariffs than just another tax.  A tariff can be used to protect an infant industry, or revitalize an old industry.  If government is not careful, the tariff can protect a runt industry at the expense of the people. Tariffs should be applied with care, since like any tax, the people always pay for them. 

 

Note: I have to use the term "rent" in its technical economic sense, which has different meaning than everyday use. 

 

In economics, rent (or economic rent) means any payment to a factor of production (land, labor, capital, or a resource) that exceeds the minimum amount necessary to keep that factor in its current use.In other words, it is a surplus payment above opportunity cost.Key Points:

• It is not the everyday meaning of rent (what you pay for an apartment).
• Classic example: the excess return earned by a landowner simply because the land is scarce and well-located, beyond what is needed to prevent the land from being left idle.
• In the context of trade policy, quota rent is the artificial scarcity premium created by an import quota—the difference between the higher domestic price and the lower world price. Whoever holds the import license receives this rent.

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1. What a Tariff Is

A tariff is a tax imposed on goods or services when they cross a national border, almost always on imports.

The most common forms are:

• Specific tariff: a fixed amount per unit (e.g., $500 per car).

• Ad valorem tariff: a percentage of the value of the good (e.g., 25% of the import price).

• Compound tariff: a combination of the two.

2. Immediate Effects in a Competitive Market

Consider a single good that is both produced domestically and imported.

Without a tariff (free trade):

• The domestic price equals the world price (\(P_w\)).

• Domestic consumers buy a relatively large quantity.

• Domestic producers supply a smaller quantity.

• The difference is imported.

With a tariff of size (t):

• The domestic price rises to approximately \(P_w + t\) (in a small country that cannot affect world prices).

• Domestic producers can now charge a higher price and still compete with imports.

• As a result:

  • Domestic production increases (the protective effect).

  • Domestic consumption decreases (because the good is more expensive).

  • Imports fall by the combined effect of higher domestic supply and lower domestic demand.

  • The government collects tariff revenue equal to \(t \times\) the remaining volume of imports.

3. Distribution of Gains and Losses

A tariff redistributes welfare:

Group	Effect of the Tariff	Reason
Domestic producers	Gain	Higher price and greater sales volume
Domestic consumers	Lose	Higher prices and lower consumption
Government	Gains revenue	Tax collected on remaining imports
Foreign producers	Usually lose	Smaller export volume to the tariff-imposing country

The losses to consumers are typically larger than the gains to producers plus government revenue. The difference is deadweight loss (net efficiency loss to the economy). This loss comes from two sources:

1. Production inefficiency: Some goods are now made domestically at higher cost than they could have been obtained from abroad.

2. Consumption inefficiency: Consumers buy less of the good than they would at the true world opportunity cost.

4. Small Country vs. Large Country

• Small country: Takes the world price as given. A tariff unambiguously reduces national welfare (the deadweight losses exceed any gains).

• Large country: Can influence the world price. By reducing its demand for imports, it may drive the world price down. In principle, a carefully chosen tariff can improve the large country’s terms of trade enough to raise its national welfare (the “optimum tariff” argument). In practice, retaliation by trading partners often erodes or eliminates this gain.

5. Common Arguments for Tariffs

Economists generally view tariffs as costly, but several arguments are frequently offered:

• Infant-industry protection: Temporary tariffs may allow new industries to mature and become competitive. (Success depends on the industry eventually becoming efficient and the protection actually being temporary.)

• National security: Protection of industries deemed critical for defense.

• Strategic trade policy: In industries with large economies of scale or monopoly profits, tariffs or subsidies might shift profits toward domestic firms.

• Retaliation / bargaining: Tariffs used as leverage in trade negotiations.

• Revenue: In some developing countries, tariffs are an important source of government revenue because they are easier to collect than income taxes.

• Protecting jobs or communities: The most politically potent argument, even though the consumer costs per job saved are often very high.

6. Broader and Dynamic Effects

• Retaliation: Other countries may impose counter-tariffs, reducing the first country’s exports and harming its export-oriented industries.

• Input costs: Tariffs on intermediate goods raise costs for domestic downstream producers, potentially reducing their competitiveness.

• Supply chains: Modern production is fragmented across borders. Tariffs can disrupt these chains and raise costs more than simple models predict.

• Rent-seeking: Firms may invest resources in lobbying for protection rather than in improving efficiency.

• Long-run growth: By reducing competition, tariffs can weaken incentives for innovation and productivity improvement.

7. Summary of the Core Logic

A tariff deliberately drives a wedge between the world price and the domestic price. This wedge:

• Protects domestic producers and encourages them to expand output,

• Penalizes domestic consumers,

• Generates revenue for the government,

• Reduces the volume of trade, and

• Creates net efficiency losses for a small country (and often for large countries once retaliation is considered).

The policy is therefore a way of favoring one group (import-competing producers) at the expense of others (consumers and, frequently, the economy as a whole).

What Inflation Actually Is

Inflation isn't just an increase in prices.  This is a technical description of inflation actually is.

Inflation is a sustained increase in the general price level caused by an expansion of the money supply that outpaces the growth in the real supply of goods and services.

In other words, it is a change in the ratio between the quantity of money (and credit) available in an economy and the quantity of real goods and services available to buy.

When more money is created relative to the volume of goods and services, each unit of money becomes less valuable. Sellers then demand more of those less-valuable units in exchange for the same goods. That is the rise in prices we observe.

Key Distinctions

1. A one-time price increase is not inflation.
   If a hurricane destroys orange crops and orange prices jump, that is a relative price change caused by a temporary scarcity. Once supply recovers, prices can fall again. True inflation is a general and persistent rise across most prices.

2. Deflation is the opposite.
   When the money supply shrinks relative to goods (or goods expand faster than money), the value of money rises and the general price level falls.

3. The quantity theory of money (in its simplified form) captures this relationship: 

   [MV = PY] 

   Where:

   • ( M ) = money supply

   • ( V ) = velocity of money (how quickly it circulates)

   • ( P ) = price level

   • ( Y ) = real output (goods and services)

   If ( M ) grows faster than ( Y ) (assuming ( V ) is relatively stable), ( P ) must rise.

Two Common Drivers

• Demand-pull inflation: Money and credit expand rapidly (through bank lending, government spending financed by money creation, etc.), increasing purchasing power faster than production can respond.

• Cost-push inflation: Supply shocks (energy crises, wars, major disruptions) reduce the availability of goods. Even if the money supply stays the same, the ratio of money to goods worsens, producing higher prices. Persistent cost-push effects often require accommodating monetary expansion to become true ongoing inflation.

Why the Distinction Matters

Calling every price rise “inflation” obscures the cause. A drought that raises food prices is not the same phenomenon as a central bank expanding the money supply by 20% in a year. The remedies are completely different. One requires more production or better logistics; the other requires restraining the growth of money and credit.

In short:
Inflation is not merely “prices going up.” It is a decline in the purchasing power of money caused by an imbalance between the stock of money and the stock of real goods and services.

Islam is Not Kind to Christians

Recently, a handful of popular podcasters have claimed that Islamic regimes are historically “very kind” toward Christians. Those who make this claim are either willfully ignorant or are advancing an agenda. The historical record is not ambiguous. 

For example, the claims that relations between Islam and the Christian world were peaceful for 500 years until the First Crusade are false. Mohammad died in 632. By 732, Islam had taken the Holy Land and North Africa from the Christian Byzantine Empire. It had also conquered Spain and advanced into France a few hundred miles from Paris.  

After taking additional land in southern France and establishing bases in the Alps, Muslims launched raids into Germany. They also sacked the outskirts of Rome and took control of Sicily. In 1071, they defeated the Byzantines and took control of most of modern Turkey. Twenty-four years later, the Byzantine Emperor asked the Pope for help, leading to the First Crusade. 

Christians in these conquered territories were treated as dhimmis, second-class citizens who were required to pay the jizya, a special tax and sign of submission that was often accompanied by ritual humiliations. Failure to pay the tax could result in death, enslavement, and the destruction of the local church building.  

No public displays of Christianity were allowed, including the ringing of church bells or even praying aloud in one’s own home within earshot of a Muslim. No new churches could be built, and no old churches could be repaired without permission, which was rarely given. Criticism of Islam and evangelizing Muslims was strictly forbidden. In court, a Christian’s testimony was worth less than a Muslim’s. Christians could not have authority over a Muslim or have a house taller than a Muslim’s. They could not bear arms or ride a horse. At times, they were forced to wear distinctive clothing. 

Another claim is that Muslim rulers protected Christian holy sites and repaired them when damaged. Again, nothing could be further from the truth. Typically, important Christian holy sites were converted to mosques to show the victory of Islam. The most prominent example is Hagia Sophia in Istanbul, the largest church in Christendom for 1000 years. When the city fell to the Turks, it and other churches were desecrated and converted to mosques. 

An exception was the Church of the Holy Sepulchre in Jerusalem, perhaps because it was a major pilgrimage site that generated revenue for the Caliph. However, in 1009, Caliph Al Hakim destroyed it. It lay in ruins for decades until his successor allowed the Byzantines to rebuild it, likely to again collect pilgrimage revenues. 800 years later, the church was severely damaged in a fire.

Local Christians blamed Muslims, but the official story is that it was caused by a candle or oil lamp. The Ottomans allowed it to be repaired using Christian funds donated from overseas. They did not pay for the repair. 

In the Ottoman Empire, that some claim was kind to Christians, boys were taken from Christian homes to be raised as Janissaries, or Muslim slave-soldiers who were taught to despise their Christian families. Girls were often taken as slaves into harems, and violence often broke out against Christian communities in Ottoman territories. The worst violence was the Armenian, Assyrian, and Greek genocides of the early twentieth century, in which between 1.5 million and 2.5 million people were killed by the Ottoman government. 

The same violence against Christians continues today, with abductions, forced marriages, murders, arson of churches, and oppression of Christians in places like Pakistan and Egypt, and increasingly in Europe. There is a prohibition of churches in Saudi Arabia and other Muslim countries and, of course, the ongoing slaughter of Christians by Islamists in Nigeria and elsewhere in Africa. 

So no, Islam has not been kind to Christians. The only reason to make this claim is to make the occasional anti-Christian acts of Israelis look worse. But there is no comparison. Christians in Israel have more rights and freedoms than in any Muslim country, especially in history. To claim otherwise is to ignore reality. 

John Stonestreet, Glenn Sunshine

https://breakpoint.org/no-islam-is-not-kind-to-christians/ 

 

Faithfulness in Hong Kong

As the United States approaches its 250th anniversary, internationally, another milestone should be recognized. July 1, 1997, marks the anniversary when the British government handed over control of Hong Kong to the People’s Republic of China. A 50-year transitional period was established under a principle known as “one country, two systems,” in which Hong Kong serves as a capitalist center in an otherwise Communist nation. It also serves as the hub for religious freedom, with 1.4 million Protestants and Catholics living there who have ministry proximity into mainland China. 

But on this 29th anniversary of the handover, the future of the Church and of religious liberties there is far from clear. While many Hong Kongers hope to hold onto these freedoms and retain the degree of independence until 2047, others are apprehensive, believing that Hong Kong will more likely be assimilated into the mainland politically, legally, and ideologically. 

Afterall, in 2014 the Chinese Communist Party interfered with the Hong Kong elections by screening out any candidates they deemed disloyal to China, contradicting the spirit of “1 country, 2 systems.” This led to over 1.2 million people who took to the streets in peaceful protest, using yellow umbrellas to deflect tear gas.   

In 2019, protests were renewed over a proposed extradition bill, which gave carte blanche for the CCP to persecute anyone they deem a threat to the motherland, including ministry workers. In a city of 7.5 million people, an estimated 2 million protested what became the National Security Law, many pushing children in strollers or elderly in wheelchairs. Protestors were backed and, in many cases led, by Hong Kong’s Christian population. At one point, the praise chorus “Sing Hallelujah to the Lord” became an unofficial anthem of the protests. 

In fact, it is impossible for the power of the Chinese state to grow in Hong Kong without Christians appearing as an increasing threat. First, Christianity is incompatible in a moral sense. As former Cardinal Joseph Zen put it, Christianity is a rejection of “the whole culture, which is now reigning in China, a culture of falsity, of dishonesty, a lack of spiritual values.”  

Second, and more importantly, Christianity is incompatible with Communism in its view of reality itself and, especially, Who is in charge over it. To call this a conflict of interest for Christians in Hong Kong is an understatement.  

Already, in response to the security law, Hong Kong has seen a mass exodus of young professionals and ministry workers. Most churches no longer have enough volunteers or giving to sustain them. Smaller churches have merged to avoid closing, while other larger multi-site churches have closed campuses after losing over 1,000 congregants. The church workers who stay in Hong Kong find themselves carrying more responsibilities to an aging congregation, with few prospects of finding someone to carry on their work. 

Of course, what has always been true about the Church’s existence and flourishing remains true for Christians in Hong Kong. Our hope has never been dependent on who is sitting on an earthly throne. Certainly, whether Hong Kong is ruled by a Communist regime or a democratic party matters greatly in terms of freedom, safety, and the future. Still, either way, the risen Christ is Lord over all Creation and has called His people to that specific time and place in history, to that specific moment within God’s grand story of redemption.  

God has called some Christians to remain in Hong Kong. They must count the cost of what it will take to be the Church there, to minister to the physical and spiritual needs of people, and to live as counter-cultural ambassadors in an otherwise frenetic metropolis. With 2047 looming, Christians there will be forced to recommit, over and over again, to Christ in an increasingly authoritarian city, while also accepting the weight of the task to which God has called them.  

At the same time, like He has throughout history in times of increasing cultural pressures, God has sovereignly used the situation to in Hong Kong to send His people out from there to other places around the world. In addition to reminding us of the plight of Christians in Hong Kong, they will take the Church forward and to other places, serving as businessmen, attorneys, fathers and mothers, computer engineers, and leaders who hold fast to Christ and live under His Lordship in a new time and place.   

For the American church, this is a cautionary tale of what happens when religious freedoms are lost. Even more so, it is a wonderful affirmation that God is at work, and the Gospel is lived out by His people in His strength. We have a shared Lord, and a shared calling, to be faithful and committed where He has placed us, regardless of how difficult it may be.  

 

From Breakpoint 

Did Trump make COVID-19 vaccines un-available?

Short answer, No.

COVID-19 vaccines are available in the United States for the 2025–2026 season, but eligibility is restricted compared to previous years. The FDA has approved updated vaccines from Pfizer, Moderna, and Novavax targeting the JN.1 lineage of the Omicron variant. These are primarily recommended for:

• Adults aged 65 and older.
• Individuals under 65 with certain high-risk conditions (e.g., obesity, asthma, cardiovascular disease, or other chronic health issues as defined by the CDC).
• Children aged 6 months and older with high-risk conditions (Moderna and Novavax only, as Pfizer’s vaccine is no longer available for those under 5).

You can get vaccinated at pharmacies like CVS, Walgreens, or other providers, often at no cost with most insurance, though restrictions apply based on state laws and eligibility. Some pharmacies may require a prescription until the CDC’s Advisory Committee on Immunization Practices (ACIP) issues final recommendations, expected after their September 18, 2025, meeting. 

The CDC’s Bridge Access Program, which provided free vaccines for uninsured individuals, ended on August 31, 2024. For the most accurate information, check with your local pharmacy or healthcare provider, or use Vaccines.gov to find locations by entering your ZIP code.