Question

If there is a net loss to society from tariffs, why do tariffs exist?

Answer 1

Tariff results into deadweight loss which depicts net loss to society from tariffs but individuals consider their own interest in their decision making rather than the well-being of society. If a business can reduce foreign competition by increasing their price then it will do that regardless of the loss that soceity will suffer from that action.

Tariff increases the surplus of producers in the economy because they get more price for their good so tariffs are imposed on the imported goods.