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Isn't it a bit arbitrary to say that Pareto efficiency is "good" by definition within economics but Kaldor-Hicks requires one to adopt utilitarianism? (Particularly in cases where Pareto efficiency is not possible, which is most of the time in reality.)

In fact, many people don't like Pareto efficiency if it helps those participants get richer while nonparticipants don't, thereby creating inequality. If you consider inequality an externality then most commerce is bad by default, unless those gains are redistributed.

The example of tariffs is particularly funny because tariffs begin as an arbitrary tax imposed by governments on transactions with foreigners, so it's restraining gains from trade for some to benefit others, but the overall result is typically negative-sum. Imposing tariffs is therefore pretty far away from Pareto efficient, so arguing getting rid of it wouldn't be "good" under "pure economics" because it only passes Kaldor-Hicks standards is a terrible way to frame an argument of where economics ends and ethics begins.

Better to say "positive-sum" is good, even if everything can't always be positive-sum for everyone all the time.

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