Tariffs and Quotas: Who Gets the Money

The NYT reported that the Trump administration is considering replacing the tariffs it imposed on aluminum and steel imports from Mexico and Canada with a system of quotas. There is an important economic dimension to such a shift that was left out of the piece.

If the U.S. imposes a tariff on an import then it is effectively imposing a tax on U.S. consumers. The government gets to keep the revenue. For example, if steel is imported at a price of $700 a ton and we impose a 10 percent tariff, t...