The U.S. government had to decide whether X-Men are human.
Our story starts with the U.S. Customs office. Included in a very long list of items that enter the U.S. are “dolls” and “toys.” According to Customs officials, any figure that clearly represents a human being is a doll; if not, then it is a toy. Importers care about the difference because the tariff on dolls (12%) is much higher than toys (6.8%).
And that takes us to Marvel Comics. While we all can agree that Barbie is a doll, what about action figures? The U.S. Customs office said action figures are dolls; Marvel disagreed. This Radio Lab podcast wonderfully describes the issues.
The Economic Lesson
When looking at tariffs, as economists, we should check the cost of the jobs that were saved. This 2002 Dallas Fed report concluded that each year, a tariff on sugar costs consumers $1,868 million in higher prices. More specifically, each one of the 2261 jobs that was saved costs $826,104 annually.
An economic question: Explain why tariffs generate considerable support even when their cost is high.