Garys Economics Special: Can tariffs make us rich? With Ha-Joon Chang
Apr 3, 2025
Discover how tariffs have historically propelled nations like South Korea and the US to economic success by protecting burgeoning industries. Learn about the concept of infant industry protection and how strategic tariffs can elevate living standards. The discussion also critiques the current approach in America, questioning whether broad tariffs can truly revive industries or if deeper financial system issues must be addressed to combat inequality and inflation.
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Tariffs: A Double-Edged Sword
- Tariffs, like any policy tool, can be beneficial or detrimental depending on their implementation.
- Their effectiveness hinges on the purpose and method of their application.
Infant Industry Protection
- The "infant industry protection" theory suggests supporting nascent industries through tariffs and subsidies until they can compete globally.
- This mirrors child-rearing, where short-term cost savings are sacrificed for long-term high productivity potential.
Historical Use of Tariffs
- Historically, countries like Britain and the US used protectionist measures, including high tariffs, to foster domestic industries.
- The US, while developing, had tariffs as high as 40-50%, demonstrating their historical use in economic growth.