Aspects of the Theory of Tariffs (Collected Works of Harry Johnson)

12.  The Theory of Tariff Structure, with Special Reference to World Trade and Development*¹

The formal theory of tariffs, like most of the theory of international trade, has been constructed on the assumption of a world in which commodities are all final goods – goods destined for final consumption – and are produced entirely with the use of original factors of production. Yet in the real world, many commodities are raw materials, fuels, intermediate goods, or capital goods destined for use in production processes making other goods; and the production processes for making commodities use other commodities as inputs, in addition to using original factors of production. Similarly, in the real world international trade comprises not only goods ...