Posts Tagged ‘Protectionism’

The fall and fall of U.S. tariff barriers

March 1, 2019

Click to enlarge. Hat to Barry Ritholtz

The United States, like almost all industrial countries, built up its infant industries behind protective tariff walls that shielded them from more efficient, because longer-established, competitors.

This historical graph shows what has happened since then.  Tariffs against foreign imports are down to a tiny fraction of what they were in the 1930s or 1940s.

President Trump deserves credit for forcing trade policy onto the national agenda.  Unlike his predecessors, he does not argue that more and more globalization is the answer  He is right that it is time for a change.

But trade wars aren’t an answer either

Rather the U.S. should do what successful exporting nations do, which is to build up their industries through a carefully targeted industrial policy.

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