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Has there been a case where an increase in import taxes was linked to an improved economic status in a country? Ie - resulted in net jobs saved, increased GDP etc. It doesn't need to necessarily be economic, but does need to be measurable.

There is some pretty strong arguments against taxes on cross-border trade, however import tariffs are pretty standard world wide.

I read last night (and now can't find!) of a brief history of tariffs and their follow-on effect, and it was not positive. However, the article could have been cherry-picked etc.

For bonus points, what are the countries in the world with the highest/lowest tariffs. Can we infer anything about import taxes effects on a country from these results?

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    Isn't protectionism how the US bootstrapped its economy? I vaguely recollect that it was only when the US began to rank among the strongest economies that it changed its mindset on the topic.
    – Denis de Bernardy
    Mar 4, 2018 at 15:14
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    As a starter, UK's restrictions on importations of cloth from the Netherlands kick started their first idnustrial revolution.
    – Evargalo
    Mar 5, 2018 at 11:57
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    @jamesqf: however difficult causality might be, it's worth raising that during the industrial revolution, independent countries that embraced protectionism ended up faring well (the US, Japan) while countries that were forced to embrace free trade are now called developing countries.
    – Denis de Bernardy
    Mar 6, 2018 at 8:00
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    @DenisdeBernardy RE early US tariffs, the question is partly cause and effect. See this article cato.org/publications/commentary/truth-about-trade-history (admittedly by Cato) for a short look at early US tarifs. Also note that during this period (19th century) Britain had a very open-border policy, and was the clearly dominant country economically.
    – FrozenKiwi
    Mar 6, 2018 at 11:12
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    @FrozenKiwi: en.wikipedia.org/wiki/Protectionism_in_the_United_States - There's an apt Monroe in there, too: "whatever may be the abstract doctrine in favor of unrestricted commerce,” the conditions necessary for its success—reciprocity and international peace—“has never occurred and can not be expected.” Monroe said, “strong reasons… impose on us the obligation to cherish and sustain our manufactures.”
    – Denis de Bernardy
    Mar 6, 2018 at 12:13

3 Answers 3

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Usually, when import tariffs are imposed, they work as advertised. Almost without exception.

Your question, however, is about their impact on economy, and that is entirely different beast. Basically it is never positive. This has nothing to do with cherry picking - although I'm sure you could find papers proving both their beneficial and detrimental effect - but with basic logic from the perspective of consumer (who is ALWAYS on the receiving end of any sort of taxation): tariff is a tax. It is a tax worst of them all, because by restricting imports it necessarily restrict exports.

So to answer your question: when ever tax was beneficial for economy and/or caused increase in GDP? Like I said: logic.

As for countries with highest tariffs and their condition - If I read the tables from WTO right, top list includes Congo, Venezuela, Mexico, Colombia, Sierra Leone, Chile, Argentina, Brazil, Kuwait, Indonesia, Pakistan, Yemen, Nepal... So as you can see diverse list and not all of them obvious. With the exception of the fact that first "European" country on the list is Iceland, and it shows about half way down the list.

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  • The United States existed and prospered like no other country in history solely on tariffs and other excise taxes, until 1913. The creation of Keynesian economics along with the Federal Reserve virtually changed free market Capitalism into Merchantilism. So the correct answer could be: tariffs and protectionism work very well in true capitalist economies
    – Aporter
    Feb 21, 2019 at 5:53
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It depends on what is to gain.

After WW2 some european countries applied protectionist laws to their economies. Immediately after the war, it was important to get people into work and drive domestic production, however, at some point it becomes more efficient to reduce protectionism. That's why nowadays not all countries produce their own steel, cars, etc. Now, with their reliance on global trade, protectionism would be maleficial.

So given the proper conditions economic protectionism works, at least for some time.

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    This answer would be great if some citations were added. For example - has there been any work showing this to be the case, what are the conditions etc. A counter argument may be found pierrelemieux.com/wordpress/2016/12/03/… but I can't find anything for this view
    – FrozenKiwi
    Mar 6, 2018 at 11:20
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It depends how you define "worked". For example, a steel tariff might help steel producers, but is likely to harm consumers of steel like automobile manufacturers and construction workers due to their raw materials increasing in cost. There is also a very real possibility of retaliatory tariffs from other countries, which will hurt exporters.

In other words, it depends who the tariffs are supposed to help and what you consider an acceptable cost.

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    -1 Due to providing additional information related to the question, but not seriously trying to actually answer the question.
    – Peter
    Mar 12, 2018 at 18:07

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