Comment by anon_e-moose

Aligning incentives through financial penalties = forcing an entity to give you money until what you want happens. The key question here is intent - 1)which entity, 2)what's the scope of what you want to happen, 3)what happened before and 4) can you do something about it if you're disadvantaged?

Tariffs and fines, for lack of better words, are both aligning incentives through financial penalties, but they are still different things.

The EU (governmental body) created laws to price in negative externalities and punish offenders until they correct their behavior. Fines will punish corps (private citizens) directly, with little collateral damage, until they stop being anti-competitive.

A fine forces a 1)small target to follow 2)a specific law and uses, like tariffs, financial penalties to achieve this. That law is a long term reflection of people's local culture and values, and it 4)can be appealed and judged. 3)A negative externality was priced in as a law and a fine.

-- Right now, you have the Trump admin (gov body) applying tariffs to other countries (gov body) because they want manufacturing (private citizens) back in US soil. There is clear widespread collateral damage.

A tariff shapes the economic behavior of a 1)big target and, like fines, also uses financial penalties to achieves this. The desired economic outcome is a 2)trading strategy of a temporary administration. There is collateral damage. 4)There is no court, judge or 3rd party to appeal to, you as a government can only try to negotiate with the other government. 3) Two governments that were having mutually beneficial and consensual trading are now no longer doing so, there was no negative externality here, and while Trump may claim so it does not make it true that other countries were taking advantage of America. See trade balances considering products and services, as one example of lies trying to make it look like US was getting short changed by the world, it was not.

If tariffs and fines still feel like the same thing, it's only because 1)corporations have become government-sized and have achieved government-like powers; and 4) that 3rd party of the judicial branch seems to be more and more taken over by just the government itself, who might actually be a gov-sized and gov-powered corporation.