Imports: Good for the Economy

"U.S. companies spend about $100 billion more on imported inputs ($504 billion) than consumers spend on final goods ($411 billion). This distinction is important because, when most people think about imports, we think about finished, retail consumer goods like Toyotas from Japan, toys or big screen TVs from China, etc., and don't realize that the majority of imports are inputs, raw materials and capital equipment for U.S. firms. Raising trade barriers with protectionist tariffs would create significant harm for U.S. companies and their employees by artificially raising the price of their inputs, putting them at a competitive disadvantage in an increasingly competitive global economy.

Bottom Line: Tariffs on imports are essentially punitive taxes on the inputs of U.S. producers, and if you tax something you'll get less of it, including fewer jobs for Americans working at U.S. companies buying inputs from abroad."

from Carpe Diem