Markets are very efficient things for allocating prices. No genius can sit at his computer and figure out the “correct” price for a commodity, because the correct price of a thing is nothing less or more than what people are willing to pay for it. That’s one of the reasons that planned economies fail.
However, it’s a mistake to think that markets are perfect, or that they can solve all problems. There are very few free markets. Most of them have distortions — for one reason or another.
Right now, the oil price war between Saudi Arabia and Russia threatens the health of the domestic oil industry. Or, to put it another way, private companies in the U.S. have to compete against government-funded companies overseas.
That’s not right, and that’s a perfect example of when governments should intervene — perhaps with a tariff.
We don’t want to imitate Saudi Arabia or Russia and nationalize our oil companies. We want them to compete in as free a market as we can manage.
But when other parties aren’t playing fair, it makes sense to impose a tariff to prevent long-term harm to domestic companies.