B, to retaliate, shuts out iron and hardware against X.
Then the makers of iron and hardware cry out that their trades are being ruined.
So X closes its doors against iron and hardware from C.
In return C refuses to take cloth from X.
Who is the gainer by all these prohibitions?
Answer
All the four countries have diminished their common fund of the enjoyments and conveniences of life.
The open ports of the United States, after the conclusion of the American Revolution, were a source of keen gratification to Franklin. They had brought in, he thought, a vast plenty of foreign goods, and occasioned a demand for domestic produce; so that America enjoyed the double advantage of buying what they consumed cheap, and of selling what they could spare dear.
The following views in a letter from him to Jared Eliot, as far back as the year 1747, sound like a recent tariff reform speech in Congress:
First, I imagine that the Five Per Cent Duty on Goods imported from your Neighbouring Governments, tho' paid at first Hand by the Importer, will not upon the whole come out of his Pocket, but be paid in Fact by the Consumer; for the Importer will be sure to sell his Goods as much dearer as to reimburse himself; so that it is only another Mode of Taxing your own People tho' perhaps meant to raise Money on your Neighbours.