Imagine two businesses across the street from each other: a hardware store and a café. Once a year, the café buys a set of pans from the hardware store to keep its kitchen running. Meanwhile, every day, the hardware store’s employees pop over to the café for lunch—sandwiches, coffee, maybe a slice of pie. At the end of the year, the hardware store’s manager tallies up the books and frowns. “Look at this!” he says. “We’re spending way more on lunches than the café spends on our pans. We’ve got a trade deficit with them! This has to stop.”

Sounds familiar? It’s the kind of logic you hear on the news: “Country X buys less from us than we buy from them—unfair!” The solution, we’re told, is tariffs—taxes on imports to “level the playing field.” But let’s stick with our little story and see why this thinking doesn’t hold up. Spoiler: it’s not just about pans and sandwiches—it’s about how trade really works, and why tariffs often make things worse, not better.

The hardware store manager’s complaint seems reasonable at first. Money flows out of his business to the café every day, while the café’s purchases are a rare event. He feels like he’s losing. But step back for a second. Why are his employees buying lunch there? Simple: they like it. The café’s prices are good, it’s close by, and the food hits the spot. No one’s forcing them—they’re choosing to spend their hard-earned cash because it makes their day better.

Now flip it around. The café buys pans once a year because that’s all it needs. Pots and pans........

© Eurasia Review