Watermelon, Wine and Why Not
I have a memory of being parked on the side of I-40 just east of the Arizona, New Mexico border eating a watermelon. Why? Well, at that time (30 years ago) Arizona was not allowing fruit in from other states--or at least not from New Mexico. We had learned that if we had certain/any (do not recall) fruit and vegetables in the vehicle, the personnel at the state line would confiscate what we had. If I remember correctly, the policy was in place to help keep certain pests or diseases away from Arizona's crops. Whatever the specific reason might have been for the policy, it resulted in a pretty steep tariff.
Tariffs (or outright proscriptions) for particular foodstuffs are still in force in a number of states. I find it particularly interesting to see how states handle something as common as wine. Unless one runs a winery or is otherwise licensed to transport or store wine, one may well be in violation of state laws because one picked up a few bottles while on vacation. In the state of South Dakota, for example, it is not permissible to transport more than 1 gallon of wine across the border from another state. And, one must have purchased it for one's own use. Further, if one found a lovely vintage while traveling through Oregon but would simply like to ship some to one's home, one cannot legally do that.
Exactly what bearing does such a topic have on investing? We invest in businesses which engage in trade. These businesses, and our investments, tend to do well when the market is less restricted and we have greater access to consumers of our products and services. We talk of NAFTA, an agreement whereby the US and Canada and Mexico all happily go to the marketplace together, but how much damage do states do their own economies by either passing laws which prohibit the free trade of goods across state lines and/or by actively seeking to protect local industry at the expense of their own citizens?
So, why not build such tariffs between the states? For starters, doing away with interstate tariffs was part of the reason for forming the United States. Perhaps those folks knew what they were doing after all.