system
Given the following post, respond as if you're commenting on Reddit:
human
In what situations are Tariffs good for an economy?

I've been reading Tim Harford's The Undercover economist and he mentioned that tariffs are almost always bad for an economy. I am assuming there are situations in which they could be beneficial though - say the Govt. is trying to help a sector grow due to possible future gains. 

Am I wrong? Or have I missed something?
gpt
There are two "textbook" situations where tariffs can benefit an economy:

1. If a country has a large domestic market for an imported good and the production technology for that good features increasing returns to scale (per-unit costs decrease as a firm gets larger), an import tariff could make it profitable for domestic start-ups to enter the market and grow to a level where per-unit costs are comparable to existing international firms, and would therefore be able to compete in the global market once the tariffs are lifted. The short run losses caused by the tariffs would be offset by the efficiency gains from the new domestic industry once the tariffs are lifted. Note that there is no aggregate benefit to the country if the tariffs are not eventually eliminated. Some models suggest that this outcome could also be accomplished more efficiently using quotas rather than tariffs.

2. If a country is the dominant importer of a particular good and that good is supplied inelastically (the quantity produced is not sensitive to the price), then a small tariff might increase aggregate welfare. The increase in domestic price that results from the tariff is partially offset by the decrease in the global price of the product driven by the decrease in demand (due to the tariff). This offset, combined with the government revenue from the tariff itself, could be large enough to entirely offset the "deadweight loss" associated with the tariff. Note that the tariff would have to be small and the country would need to have considerable market power for this to work.

Neither scenario is likely to occur with any regularity in the real world.