The myth of as an engine of economic development of those has been reinforced by narratives over the years. However, the idea that high tariffs were essential to turning the country into an industrial power ignores evidence. Studies such as Alexander Klein and Christopher Meissner point out that productivity gains and industrial sector growth have been driven, above all, by technological advancement, the expansion of the domestic market and the flow of foreign investments. That is, the development in the American Golden Age came despite the tariffs and not because of them.
Another crucial point is the effect of tariffs on o. Tariff policy, implemented in the United States in 1930, established a substantial increase in a wide range of products.
Created to protect industry and foreigner during the large depression, the measure significantly raised costs for importers and triggered commercial retaliation from several international partners. The analysis of this policy well illustrates the negative impact of protectionism on global and American trade. Using a quarterly data set on bilateral trade from 99 countries during the delivery period, Mitchener, Wandschneider and O’Rourke (2021) demonstrate that, after the adoption of the rate in 1930, US exports to the retaliated countries fell between 28% and 33%, while those who only protested reduced their imports by 15%to 22%. That is, protectionist barriers did not strengthen the US economy – otherwise they have impaired their performance in international trade.
The case of Smoot-Hawley is emblematic because it reveals how protectionism can turn into a foot in the foot. Tariff policy not only reduced US exports, but also deteriorated trade relations with strategic partners, leading to a contraction of. The study used gravitational trade models, allowing to isolate the specific effect of tariffs on the flow of goods. Countries that have shredded strategic American products, such as cars, reducing their imports by up to 46%. In practice, tariffs generate reactions that precisely harm the sectors that was intended to be protected.
In addition to the impacts on trade, it had negative consequences on economic well-being. The researchers estimate that the welfare gains of the retaliated countries fell between 8% and 17% after the implementation of the 1930s tariff. Contradicting the idea that tariffs can strengthen the national economy, as their costs exceed the benefits, affecting efficiency and reducing the purchasing power of consumers.
Another argument often used to justify protectionist rates is that they promote jobs. However, in the long run, the effects are marginal or even negative. Protectionism can generate jobs in specific sectors, but the cost of increasing prices for consumers and companies that depend on.
Access to a vast reserve, large -scale migration and technological innovation were the true engines of industrial growth.
The insistence on the narrative that the United States has industrialized thanks to protectionism ignores not only empirical evidence but also the costs of. The commercial wars of the past show that the closure of markets generates more loss than gains. Protectionism, when analyzed in light of evidence, proves to be a expensive and ineffective choice for economic and social development.
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