The importer's tariff must result in a reduction in national welfare for the exporting country.• The net national welfare effect for the importing country can be either positive or negative. a tariff implemented by a "large" importing country may raise national welfare.• Whenever a "large" country implements a small tariff, it will raise national welfare.• If the tariff is set too high, national welfare will fall.• There will be a positive optimal tariff that will maximize national welfare.