Asianometry The Tariff Paradoxes of Latin America and Asia
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Apr 10, 2025 Dive into the intriguing world of tariffs and their surprising impact on economic growth! Discover how Latin America, with its high tariffs, initially outpaced the growth of East Asia prior to World War I. Explore the tumultuous fight for independence in the 1820s and the aftermath of colonial legacies. Uncover how the contrasting tariff strategies of these regions shaped their economic trajectories, prompting significant reevaluations after the war. Context and timing play critical roles in understanding this economic paradox!
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Pre-WWI Tariff Paradox
- Before World War I, Latin American countries had high tariffs, while East Asian countries had low tariffs.
- Yet, Latin American countries experienced faster economic growth during this period.
Mexican Textile Tariffs
- After independence, Mexico imposed a 25% tariff on textile imports, primarily for revenue, not protectionism.
- Despite this, British imports continued, leading to riots and a temporary import ban proposal by President Guerrero.
Tariff Rate Disparities
- By 1885, Latin American tariff rates were five times higher than those in Asia due to various factors.
- These factors included colonization, unequal treaties, population size, urbanization, and trading partners.