There’s a lot that previously influential figures have said that is usually forgotten by the public. However, every once in a while, there comes a quote that stands the test of time and remains relevant throughout. One such quote is by Milton Friedman, an American economist, who was considered to be one of the most influential intellectuals of the 20th century. Friedman was best known as an advocate of free-market economics and reshaping modern thinking about money, inflation, and government policy.
In LiveMint‘s quote of the day, we focus on a quote by Friedman, which seems to be more apt than ever. “The benefits of a tariff are visible. Union workers can see they are ‘protected’. The harm which a tariff does is invisible. It’s spread widely. There are people that don’t have jobs because of tariffs, but they don’t know it.”
What it means
The quote points to the difference between what is easily seen and what is often overlooked in economic policy. While the benefits of tariffs are visible, indicating the immediate benefits that can be seen, which often include the protection of workers. Once a tariff is imposed, companies and industries may appear protected from foreign competition.
However, what is overlooked is that tariffs can increase the prices for consumers, raise costs for businesses, and cut down opportunities in other sectors. The people affected by the indirect consequences of tariffs may not even realise that it is due to trade barriers that their expenses have gone up and job prospects have gone down.
Further, when tariffs are imposed, they raise the cost of goods imported into a country, which eventually results in higher costs for businesses that rely on those imports to be used as raw materials for their products. For instance, if the tariffs are imposed on steel, the manufacturer importing it will have to pay more, which will indirectly lead to the consumers paying the higher costs in the form of increased prices.
The manufacturer who imports steel at a higher price due to the tariffs might have to delay some of his plans to bear the tariff cost. It could vary from delaying expansion plans to not hiring additional workers. Exporters can also suffer if the countries that have been slapped with tariffs decide to reciprocate with their own set of tariffs, which could eventually bring down access to foreign markets.
The quote serves as a reminder that while several public policies can bring visible gains for some groups, for others, it quietly imposes a dispersed cost, and that the unseen effects are just as crucial as the visible ones.
Friedman said this in 1980, but it still holds true in today’s time, especially with all the tariffs that US President Donald Trump has imposed and the volatility it has created in global markets since 2025. While many countries tried negotiating a deal or accepting the imposed tariffs, China retaliated, raising fears of full-blown trade war between the two superpowers.