[mas cerveza por favor]

When Bush raised tariffs on imported steel, was that an internal tax or an external tax? Did it cause harmful economic distortions?

It was an external tax which is win-lose, instead of an internal tax which is just lose-lose.

American steel users had to pay more, but this negative distortion could have been offset by lower domestic taxes for these users. Steel workers were kept off welfare and the country did not lose a militarily strategic manufacturing capability.

Having said that, I think that a general tariff to offset domestic taxes is better than picking individual industries to protect. According to free enterprise ideals, there should be no taxes, external or internal. However if there must be taxes, tariffs are no more harmful than domestic taxes to ideals and are less harmful to real-world American interests.

[Toddsterpatriot]

It was an external tax which is win-lose,

It raised costs for internal American steel users. Sounds like an internal tax to me.

American steel users had to pay more

Sounds like you agree. Glad you saw the light.

but this negative distortion

See, it caused distortions as well.

but this negative distortion could have been offset by lower domestic taxes for these users.

Targeted tax cuts for steel consumers? Sounds a bit clunky.

Steel workers were kept off welfare

And workers in steel consuming manufacturing companies were put on welfare.

Having said that, I think that a general tariff to offset domestic taxes is better than picking individual industries to protect.

What rate would you prefer?