With the ongoing trade war over tariffs between the Trump administration and countries around the world, I was curious as to how the implementation of tariffs has affected countries. Would it yield painful short term results as economic adjustments were slow to catch up to the tariffs, but successful long term impacts as countries insourced everything and became vertically integrated, similar to successful companies like SpaceX? Or would the pain last long term as well? Well, while I could dive into this myself (and may still), I figured I’d give ChatGPTs Deep Research function a try. While I still need to do a thorough review of the information myself, I decided to post the raw response to the below prompt:
“Do a deep dive on the impacts of Tariffs when countries have imposed new tariffs, with a time horizon of 1900 to 2024. Evaluate whether it actually helped improve economy and quality of life for the country, and any other impacts. Provide data to back up all information. Evaluate only first world countries. Include any additional information you find relevant”
ChatGPT’s response to clarify:
“To get started on a deep dive into the impacts of tariffs from 1900 to 2024 on first world countries, could you please clarify a few things:
- Do you want a report-style output with structured sections and tables where applicable?
- Are there specific countries you’d like me to focus on (e.g., the US, UK, Germany, Japan), or should I include a broad range of first world countries?
- Would you like the evaluation to include both short-term and long-term economic and quality-of-life outcomes from each tariff policy?
- Should the analysis cover specific industries affected by tariffs, or remain at the national economic level?”
And finally, here’s the response I provided to give ChatGPT the go ahead to dive into it’s research:
“Focus on the US, UK, Germany, Japan, and France for now. 2. Yes, short term, long term, and quality of life outcomes. 3. Hmm make it more national, but include any significant industry affects for each, such as major bankruptcies or other significant impacts. 4. Yes please! Thanks!”
One preface for this: I have not reviewed and verified this myself, so read with caution and VERIFY EVERYTHING. It looks like most of the sources are correctly called out, but as I review this over the next month or so, I will also put a cleaner list of sources together.
The Impact of Tariffs on First World Economies (1900–2024)
Introduction
Tariffs – taxes on imported goods – have been a key instrument of trade policy in the United States, United Kingdom, Germany, Japan, and France over the past century. This report analyzes how tariff impositions by these first-world countries from 1900 to 2024 affected their national economies and quality of life in both the short and long term. We examine major tariff episodes (from the protectionist waves of the 1920s–1930s to post-WWII liberalization and recent trade wars) and their economic outcomes,economicsobservatory.compacts on GDP growth, trade balances, employment, consumer prices, and industrial structure. The analysis is organized by country and chronological period, with each data point backed by historical records or economic studies. Key industry-level consequences – such as major bankruptcies, protectionist “wins” or failures, structural transformations, and trade retaliation effects – are highlighted to understand the nuanced effects of tariffs on different sectors.
【56†embed_image】 Figure: Global export growth since 1800 (indexed to 1913=100). World trade expanded dramatically in two waves: a collapse during the Great Depression (1930s) and WWII, followed economicsobservatory.comse post-1945 as tariffs were reduced and economies integrated globally. By the 2000s, world export volumes were ~50 times their 1913 level, reflecting the long-term shift toward freer trade.
Historically, tariff policy varied widely among these countries. For example, at the dawn of the 20th century the UK was largely a free-trade nation, cepr.orgU.S. and France maintained high average tariffs* to protect industries【3†L94-L102】. Over time, global events like the Great Depression and two World Wars prompted turns toward protectionism that often had severe economic drawbacks – most infamously, the tariff wars of the 1930s that coincided with a 66% collapse in world trade【50†L1-L4】. In the post-WWII era, the creation of the Genereconomicsobservatory.comon Tariffs and Trade (GATT) in 1947 marked a collective reversal: average tariff levels (about 22% in 1947 for major participants) were steadily cut to single digits in the following decades【20†L7-L15】【20†L13-L16】. This shift toward trade economicsobservatory.comn coincided with strong economic growth and rising living standards across the developed world. By the 21st century, all five countries had relatively low tariff rates (mostly in the low single digits), relying on global trade rules and targeted measures rather than broad high tariffs.
Yet, the short-term impacts of tariff changes have been very evident in specific episodes. Tariffs can shield domestic industries and jobs in the short run – for instance, U.S. tariffs saved certain companies like Harley-Davidson in the 1980s by staving off import competieconomicsobservatory.comL140】. However, tariffs also tend to raise consumer prices and provoke retaliation, which can hurt other sectors. Empirical studies find that modern U.S. tariffs (e.g. 2018–2019) had full pass-throueconomicsobservatory.comc prices, meaning American consumers/importers bore 100% of the costs (about $1.4 billion loss in real income per month by end-2018)【28†L99-L107】. Retaliatory tariffs by trading partners likewise exact a toll: for example, countries responding to the U.S. Smoot-Hawley Act in 1930 slashed their imports of U.S. goods by an additional 28–32% on average【49†L123-L131】, and in 2018 China’s retaliation to U.S. tariffs led to a collapse in U.S. soybean exports (with American farmers needing government aid). The long-term outcomes often show that sustaineconomicsobservatory.comism can undermine competitiveness and productivity, whereas more open trade tends to spur innovation, efficiency, and consumer benefits. Each country’s experience, detailed below, provides evidence for these patterns.
United Staeconomicsobservatory.comand Economic Outcomes (1900–2024)
High Tariffs and Early 20th Century Growth (1900–1920s)
In the early 1900s, the United States had some of the highest tariffs in the world – a legacy of 19th-century protectionism. From 1871 up to 1913, U.S. tariffs on dutiable imports averaged 38–50%, and they never fell below 38%【9†L11-L18】. These tariffs served dual purposes: protecting fledgling industries and raising government revenue (before income tax, tariffs provided 20–30%+ of fedeconomicsobservatory.com【10†L413-L421】. During this period, the U.S. economy grew rapidly (real GNP expanding ~4.3% annually in 1870–1913) despite – or according to some economists, partly because of – high import barriers fostering domestic industrialization【22†L69-L77】. By 1900, the U.S. was challenging Britain in industrial output; American steel, machinery, and other goods dominated the home market, aided by tariff walls that foreign competitors faced. However, high tariffs also meant higher prices for consumers on imported goods and materials.
A major policy shift came with the Underwood-Simmons Tariff Act of 1913, under President Woodrow Wilson. This act dramatically lowered U.S. tariff rates (from an average of 37% down to about 15% on dutiable goods) and introduced an income tax to compensate for lost revenue【22†L73-L80】. The cut reflected a political swing toward the Democratic pro-free trade stance. In the short term, imports surged and the cost of living fell modestly as cheaper foreign goods (e.g. sugar, wool) entered. But World War I seconomicsobservatory.com global trade, and by the 1920s the pendulum swung back: the Republican-led Fordney–McCumber Tariff of 1922 raised tariffs again, restoring a high protective wall【17†L79-L88】. Fordney–McCumber authorized the President to adjust rates up or down by 50%, an acknowledgement that rigid high rates had unintended consequences – notably, it became “more difficult for European nations to export to the U.S. and earn dollars to service their war debts”【17†L83-L89】. Indeed, foreign retaliation and repayment troubles mounted as the U.S. refused to import European goods freely, an early sign of the interwar protectionist spiral.
By the late 1920s, the U.S. farm sector was in crisis (global oversupply caused crop prices to plummet). In response, Congress passed the infamous Smoot–Hawley Tariff Act of 1930, which raised tariffs to record levels on some 20,000 products. Smoot-Hawley boosted the average tariff on dutiable imports to nearly 60% – the second-highest in U.S. history【19†L171-L179】. Though intended to protect farmers and industries from foreign competition, it backfired disastrously as other countries retaliated.
The Great Depression and Trade Collapse (1930s)
The Smoot-Hawley Tariff took effect in mid-1930, just as the U.S. economy was entering the Great Depression. While tariffs were not the initial cause of the Depression (the downturn began with the 1929 stock crash before Smoot-Hawley was enacted)【19†L154-L162】【19†L173-L178】, economists agree that protectionist policies worsened the crisis【1†L183-L188】. America’s trading partners responded in kind – over 25 countries raised their own tariffs or imposed quotas in the early 1930s. The result was a global trade war that devastated international commerce. U.S. exports and imports plunged by about two-thirds in just four years【1†L181-L185】. **American exports obr.uk $5.4 billion in 1929 to $2.1 billion in 1933 (−61%), while imports fell from $4.4 billion to $1.5 billion (−66%)【52†L1-L4】. This collapse in trade exacerbated the economic freefalcepr.org, which was $103 billion in 1929, cratered to $56 billion by 1933【52†L1-L4】. Factories shuttered as foreign markets dried up, and farming communities reliant on export crops were devastated (e.g. wheat and cotton prices hit rock bottom).
Unemployment in the U.S. soared to ~25% by 1933, reflecting the depth of the Depression【19†L146-L154】. The quality of life for millions deteriorated – breadlines grew, and deflation made debts harder to bear. Smoot-Hawley became “a symbol of the ‘beggar-thy-neighbor’ cer.euthe era【18†L13-L18】. A Federal Reserve historian noted that “the Depression started when tariffs were low… but Smoot-Hawley did nothing to foster ccer.euong nations” and likely aggravated the downturn【19†L155-L164】【18†L13-L18】. Notably, a Cato Institute study in 2021 quantified the retaliation impact: countries that retaliated to Smoot-Hawley cut U.S. imports by an extra ~30%, and even those that merely protested (without formal retaliation) reduced imports from the U.S. ~20%【49†L123-L131】 – indicating the Act severely damaged America’s export prospects.
In short, the short-term outcome of these 1930s tariffs was disastrous for the U.S. economy and living standards. No major U.S. industry ultimately benefited for long; even farmers, whom the tariffs aimed to help, suffered as other countries erected barriers to U.S. agricultural exports. By 1932, economicsobservatory.comU.S. exports to Europe had fallen to one-third of their 1929 level (from $2.34 billion to $0.78 billion)【50†L27-L31】. Many economists now conclude that high tariffs worsened and prolonged the Great Depression in the U.S.【1†L183-L188】, turning a severe downturn into a global collapse.
Facing this reality, U.S. policy shifted. In 1934, President Franklin D. Roosevelt enacted the Reciprocal Trade Agreements Act (RTAA), enabling negotiated tariff reductions. This marked the beginning of a long-term U.S. strategy of trade liberalization. By the late 1930s, the U.S. had signed bilateral deals cutting some tariffs (though world trade remained sluggish). Smoot-Hawley thus “marked the end of the line for high tariffs” in America【18†L19-L22】 – a turning point after which the U.S. generally sought freer treconomicsobservatory.combed_image】 Figure: U.S. average tariff rates on imports (1821–2016). The blue line is the average tariff on total imports; the orange line is on dutiable imports only. Tariff rates were high through the 19th century, peaking with the Tariff of 1828 and again with Smoot-Hawley (1930). The Reciprocal Trade Agreements Act (1934) and subsequent GATT rounds led to a steep decline in tariffs after 1945. By 1980, U.S. average tariff rates were under 5%. Sources: U.S. Bureau of the Census; USITC.【22†L73-L80】【19†L173-L179】
Post-War Liberalization and the Boom (1940s–1960s)
After World War II, the United States took a lead role in promoting global tariff reductions to avoid a return to 1930s-style trade wars. The General Agreement on Tariffs and Trade (GATT) was launched in 1947 with U.S. support. At GATT’s founding, average tariffs among major participants (including the U.S.) were about 22%【20†L7-L15】. Through successive negotiating rounds (Geneva, Kennedy, etc.), the U.S. slashed its tariffs drastically. By 1964, the average U.S. tariff had been cut to ~15% or less【20†L13-L16】, and unilateral U.S. initiatives (like the 1962 Trade Expansion Act) further facilitated tariff cutting authority.
The effect on the U.S. economy was broadly positive in the long run. American industry and labor prospered after WWII, as the U.S. enjoyed a dominant global position and expanding export markets (helped by generally lower trade barriers)【21†L1-L4】. The 1950s–60s saw strong GDP growth (4%+ annually), low unemployment, and rising real incomes – a period sometimes called the “Golden Age of Capitalism.” Trade grew rapidly: U.S. exports and imports both rose as a share of GDP. Competitive pressure from freer trade also forced U.S. firms to innusitc.govimprove productivity. While most tariffs fell, the U.S. did maintain some select protection. For instance, in 1964 the “Chicken Tax” – a 25% tariff on light trucks – was imposed (retaliating against European tariffs on U.S. poultry) and remains in place even today, sheltering U.S. automakers in the truck market. Another example: President Nixon imposed a short-term 10% import surcharge in 1971 during a currency crisis, illustrating that even in a liberal era the U.S. could use tariffs tactically. Overall, however, the post-war trend was toward lower tariffs and more open trade, contributing to the longest period of sustained prosperity in U.S. history. Americans enjoyed greater quality of life improvements in part due to cheaper imported goods (e.g. electronics, cars) and booming export-oriented industries (e.g. aerospace, chemicals) which created high-paying jobs.
It’s worth noting that by the 1960s the U.S. average tariff was under 10% (and duties were a minor source of revenue, <5% of federal income). One side effect was that some inefficient industries that had been long protected began to struggle when faced with foreign competition – e.g. textiles and apparel saw mills close in the 1950s–60s as low-cost imports enen.wikipedia.orgen.wikipedia.orguse of voluntary export restraints and the Multi-Fiber Arrangement). But consumers benefited from lower prices, and the economy reallocated labor to growing sectors. Importantly, the U.S. by then had safety nets (unemployment insurance, etc.) to cushion workers.
Late 20th Century: Protectionist Flare-ups vs. Globalization (1970s–1990s)
By the 1970s, the world had changed: Europe and Japan were now major industrial competitors, and the U.S. faced trade deficits in some sectors. This era saw occasional protectionist flare-ups even as overall tariffs stayed low. For instance, under pressure from domestic industries hit by imports, the U.S. resorted to quotas and tareconomicsobservatory.com: e.g. Voluntary Export Restraints (VERs) on Japanese cars in 1981 (to protect Detroit automakers), and tariffs on motorcycles in 1983 (to save Harley-Davidson). The 1983 motorcycle tariff raised import duties on large bikes to 45% for one year (gradually falling to 10% by year five)【47†L5-L13】. This gave Harley-Davidson breathing room as it was the sole surviving U.S. bike maker, with its market share having plunged from 100% to <15% due to Japanese competition【46†L132-L139】. In this case, the temporary relief arguably workeeconomicsobservatory.comales rebounded and the company returned to profitability (it even requested early termination of the tariff in 1987)【45†L19-L24】. However, the cost was higher prices for consumers and strained trade relations with Japan (and Europe, whose bikes were also tariffed)【46†L149-L157】.
Other sectors saw protective measures with mixed outcomes. The steel industry, a politically important sector, repeatedly sought protection. In 1974 and 1984, quotas on steel imports were negotiated. In 2002, President George W. Bush imposed temporary steel tariffs of 8–30% to help a struggling domestic steel industry (more than 30 U.S. steel companies had filed bankruptcy around that time)【24†L143-L151】. In the short run, U.S. steel output and profits rose slightly【26†L243-L250】. But downstream manufacturers (auto parts, construction equipment, etc.) faced higher steel costs, and one study found ~200,000 jobs were lost in steel-consuming sectors – more than the total steel industry workforce – as a result【26†L247-L255】. The WTO ruled these tariffs illegal, and they were lifted by end of 2003【26†L238-L247】. This case underscored that protecting one industry via tariffs can harm many others, producing a net economic loss – all studies of the 2002 steel tariffs agreed the costs outweighed the benefits in terms of GDP and jobs【26†L240-L249】.
Meanwhile, the U.S. embraced globalization in the 1990s: it led the creation of the World Trade Organization (WTO) in 1995 and signed free trade agreements like NAFTA (1994) which eliminated tariffs with Canada and Mexico. These moves further integrated the U.S. economy globally. Tariff rates hit historic lows – by 2000 the U.S. average applied tariff was around 1.5% (though higher on certain goods like textiles). The late 20th-century shift brought long-term benefits (greater efficiency, low inflation due to cheap imports, growth of export sectors like tech and services) but also short-term adjustment costs: many “Rust Belt” industries (steel, autos, electronics) downsized or moved overseas, causing job losses and community decline. For example, hundreds of thousands of U.S. manufacturing jobs were lost in the 1970s–90s as production shifted to lower-cost countries once tariffs and quotas eased. Consumers, however, enjoyed lower prices and more variety – a boost to real income. Quality of life in the aggregate kept rising (real GDP per capita grew), but inequality widened as blue-collar manufacturing workers often faced stagnant wages without the earlier tariff protecten.wikipedia.orgssures eventually set the stage for a political backlash in the next century.
Resurgent Protectionism and Trade Wars (2000s–2024)
In the 21st century, U.S. tariff policy saw a notable resurgence of protectionism, especially under the Trump Administration. In 2018, the U.S. unilaterally imposed tariffs on steel (25%) and aluminum (10%) globally (using a national security rationale) and a sweeping series of tariffs on Chinese imports (25% on $250+ billion worth of goods) amid a U.S.–China trade war. By 2019, these tariffs covered about 12% of total U.S. imports and prompted retaliation on over $100 billion of U.S. exports (China targeted U.S. farm products, while the EU, Canada, etc. targeted iconic American goods)【19†L110-L118】【49†L139-L147】. The short-term effects were significant: domestic prices rose for appliances, electronics, and other consumer goods. A 2019 economic study found essentially all tariff costs were passed to U.S. consumers, with no meaningful reduction in foreign exporter prices【28†L99-L107】. It estimated the trade war tariffs caused a real income loss of $1.4 billion per month for Americans (through higher prices and reduced variety)【28†L99-L107】. Another analysis summarized that the tariffs “raised prices and lowered economic output and employment”, yielding a net negative effect on the U.S. economy【30†L1-L8】.
Certain protected industries saw short-term gains: U.S. steel production ticked up and employment in steel mills grew slightly in 2018–19. Similarly, the government claimed a revival in domestic washing machine manufacturing after tariffs on appliances. However, for every job saved or created, the costs were extremely high. Example: an analysis theguardian.com U.S. job saved in steel in 2018 cost approximately $900,000 in consumer costs** due to higher steel prices. Industries that use steel (from auto makers to construction) were hurt by higher input costs, and many announced layoffs or profit hits. U.S. exports also suffered: when China slapped tariffs on American soybeans, U.S. soybean exports to China plummeted (down over 50% in 2018), and farm incomes dropped, prompting the federal government to pay billions in aid to farmers. The tit-for-tat retaliation echoed the 1930s in miniature – for instance, the EU imposed tariffs on bourbon whiskey, jeans, and motorcycles in response to U.S. steel/aluminum tariffs【57†L25-L33】, aiming to pressure U.S. political constituencies. While the scale was smaller than the Smoot-Hawley episode, by 2019 global trade growth had slowed and manufacturers faced recessionary pressures, partly attributed to the trade war. The long-term outcome of these tariffs is still unfolding: as of 2024, many Trump-era tariffs remain in place (the Biden Administration has largely maintained them). Economists project they will reduce U.S. GDP in the long run by a modest amount (around 0.2–0.5%), but more importantly, they signal a break from the multilateral free-trade approach that defined prior decades【27†L23-L31】.
In terms of quality of life, the recent tariffs likely harmed U.S. consumers slightly (one study found the 2018 tariffs led to a one-time 0.3% increase in consumer prices and job losses in some sectors)【27†L5-L8】. However, the overall economy prior to the 2020 pandemic remained strong, complicating the assessment. It is clear though that tariffs are no longer a major revenue source or pervasive factor for the U.S. economy as they were a century ago – they are targeted tools. As of 2022, the average U.S. tariff rate was about 2% (trade-weighted), with higher duties concentrated on specific goods like footwear and clothing【58†L1-L4】.
In summary for the U.S.: Tariffs have oscillated from very high (early 1900s) to historically low (2000s), and their impacts have been felt in every era. Protectionist surges (e.g. 1930, 2018) provided short-term industry relief but at the cost of higher prices, foreign retaliation, and net job losses economy-wide. Conversely, periods of liberalization (e.g. post-1945, post-1990) corresponded with strong growth and improvements in living standards, albeit with painful adjustments for some workers. The U.S. experience illustrates that broad tariffs tend to do more harm than good to national economic welfare【26†L240-L249】, and that a targeted approach or alternate policies (retraining, innovation support) may better address competitiveness issues without the wide collateral damage of tariff wars.
United Kingdom: From Free Trade Leader to Protectionist Detour and Back
Free Trade Era and Early 20th Century Debates (1900–1910s)
The United Kingdom entered the 20th century as the world’s leading apostle of free trade. Since the repeal of the Corn Laws in 1846, Britain kept tariffs at minimal levels (mainly on a few revenue items like tea or tobacco). By 1900, Britain had vircolumbia.eduotective tariffs; in fact, British exports faced much higher tariffs abroad (e.g. around 34% in France, 25% in Germany, 73% in the U.S. in 1902)【3†L94-L102】. This unilateral freecolumbia.educted Britain’s philosophy that an open market for imports kept food cheap and fostered an efficient economy. However, around the turn of the century, Britain’s industrial dominance was eroding as Germany and the U.S. (with protectionist policies) industrialized rapidly. Some British politicians, like Joseph Chamberlain, argued for “tariff reform” – essentially reintroducing tariffs to protect British industry and give preferences to Empire goods. This debate peaked in the early 1900s but was interrupted by World War I.
During World War I (1914–18), Britain temporarily abandoned free trade as an emergency measure – imposing import controls and duties (e.g. the McKenna Duties on luxury goods in 1915) – but many of these were removed after the war. In the 1920s, Britain initially tried to return to its prewar open trading system (for example, it re-pegged to … gold at the prewar parity in 1925). Nonetheless, by the late 1920s British industry was suffering from high unemployment and import competition in steel, textiles, and coal. Still, political support for tariffs remained limited until the shock of the Great Depression.
The Great Depression and Turn to Protection (1930s)
In 1931–32, facing soaring unemployment and a balance-of-payments crisis, Britain made a historic U-turn on trade policy. The Import Duties Act of 1932 imposed a general 10% tariff on nearly all imports (ending eight decades of near free trade)【5†L166-L174】. An Import Duties Advisory Committee was set up to recommend even higher duties for specien.wikipedia.orgnd many rates were indeed raised beyond 10%. Simultaneously, Britain embraced **Imperial Preferenceen.wikipedia.orgttawa Conference (1932), the UK and its Dominions (Canada, Australia, etc.) agreed to mutual tariff preferences within the Empire. This meant Britain’s new tariffs hit foreign (e.g. U.S., German) goods harder while colonial imports got concessions.
Short-term economic effects: The tariffs provided relief to some domestic industries. Recent research suggen.wikipedia.orgain’s tariff increases improved certain industry-level productivity growth in the 1930s【5†L172-L180】, as sheltered firms invested in new capacity. British manufacturing output did pick up after 1933 (the UK’s recovery from the Depression, while slow initially, accelerated mid-decade). The Empire tariff system also redirected trade: the share of British imports from the Empire rose significantly (e.g. more Canadian wheat, less American wheat)【2†L33-L35】. This benefited Imperial producers and gave British consumers some alternative supply, though often at higher cost than world prices.
However, protectionism also had downsides. British export industries suffered from foreign retaliation and global trade contraction – e.g. the U.S. Smoot-Hawley tariff and others reduced UK exports (British exports in 1932 were half their 1929 level)【3†L102-L110】. Moreover, insulating domestic firms reduced competitive pressures. An economic historian noted that “weak competition… was buttressed by protectionism” in Britasiapacific.cahe UK was “very slow to give [it] up” relative to European peers【5†L187-L195】. In effect, some UK industries became complacent, relying on captive Empire markets. Quality of life: British consumers faced somewhat higher prices due to tariffs on food and goods (the 10% duty on food imports broke a political taboo – but it was accepted due to the crisis). Unemployment, while improving from the worst years (1932 peak ~17%), remained high in manufacturing areas through the 1930s, suggesting the tariffs did not spark a full industrial renaissance.
By the late 1930s, Britain had one of the highest average tariff levels among major economies【5†L181-L189】, reversing its historical position. This protective stance, combined with other interventionist policies (cartels, subsidies), contributed to Britain’s relatively slow productivity growth mid-century【5†L192-L200】. Indeed, by 1950 Britain’s economy was lagging behind countries like France and West Germany, which would soon modernize rapidly.
Post-WWII: Slow Liberalization and European Integration (1940s–1970s)
After WWII, Britain initially maintained many wartime controls and tariffs due to ongoing austerity. Unlike the U.S., the UK did not immediately slash tariffs under GATT – it was cautious, fearing for its struggling industries and maintaining Imperial Preferences. By 1960, Britain’s weighted average tariff was still high (one of the highest in GATT)【5†L181-L189】, and it clung to preferences for Commonwealth countries. This prolonged protectionism, plus domestic policies (nationalizations, price controls), meant “weak competition” persisted, contributing to Britain’s poor productivity growth【5†L187-L195】. In the 1950s, UK growth (2–3% a year) was slower than Continental Europe’s “economic miracles.” British consumers also saw fewer of the cheap imports (e.g. continental cars, appliances) that flooded European markets, which kept UK living costs higher and choice more limited in that era.
By the 1960s, it became evident that Britain was falling behind. A telling metric: by the 1970s, GDP per capita in Britain had been surpassed by France and West Germany – and by a considerable margin【5†L200-L204】. This reality drove a major policy shift: the UK sought to join the European Economic Community (EEC), whose members (France, West Germany, Italy, etc.) had eliminated tariffs among themselves and enjoyed faster trade-driven growth. After some false starts, the UK joined the EEC in 1973. This move dismantled Britain’s remaining tariffs with Europe (phased to zero by 1977) and forced an end to Imperial Preference (Commonwealth goods now faced the EEC common external tariff). Short-term impact: UK firms now faced direct competition from efficient German, French, and Italian companies. Some British industries that had been protected struggled – e.g. British Leyland (auto) and steel needed restructuring and government bailouts in the 1970s. Long-term, however, EEC entry was beneficial: Competition spurred productivity; consumers benefited from a wider range of goods (e.g. cheaper European cars, appliances). Studies found that weak UK firms either improved or exited, allowing resources to shift to more competitive sectors【5†L192-L200】.
In the late 1970s, Britain’s economy was still in turmoil (high inflation, etc.), but trade barriers were no longer a key issue – tariffs with Europe were gone and external tariffs were set by the EEC at moderate levels. Under Margaret Thatcher in the 1980s, the UK further embraced free-market policies and the global economy. Many inefficient manufacturers closed (the process often dubbed “deindustrialization”), leading to short-term job losses particularly in the North and Midlands. Yet, by the 1990s the UK had a more competitive, export-oriented economy, with strengths in services and high-tech manufacturing. Quality of life improved with lower-cost imports (Japanese electronics, European foods, etc.) keeping inflation low, and a general rise in real incomes. By 1990, tariffs were a negligible factor in consumer prices (except for a few protected items under EU policy).
Brexit and Modern Trade Realignment (2010s–2024)
A major recent development was the UK’s decision to leave the European Union (“Brexit”). After the 2016 referendum, the UK exited the EU single market and customs union in January 2020. Brexit changed the UK’s tariff regime: In place of the EU’s Common External Tariff, Britain implemented its own UK Global Tariff schedule in 2021. The new schedule slightly simplified or lowered some tariffs (eliminating small nuisance tariffs), but largely kept tariffs similar to the EU’s rates for major products. The big change was not tariffs per se (the UK-EU Trade Agreement allows zero-tariff trade on most goods meeting rules of origin) but non-tariff barriers – customs checks, paperwork, regulatory divergence – which act like a trade friction. As a result, UK trade with the EU has been adversely affected. By 2022–2023, data showed UK exports to the EU and imports were 10–15% below their pre-Brexit trend【6†L29-L37】. One study found that the uncertainty and new barriers from Brexit raised UK import prices from the EU by 11%, translating into a 0.6% rise in consumer prices overall in Britain【6†L11-L18】. This indicates a modest reduction in purchasing power – effectively a hit to quality of life – due to the reimposition of trade barriers with Europe.
On the other hand, the UK has gained freedom to strike its own trade deals. It quickly rolled over many existing EU free trade agreements and signed new deals with partners like Australia and New Zealand. Government analysis, however, suggests these new deals have minimal economic upside (the Australia FTA is projected to boost UK GDP by only +0.08% by 2035)【8†L123-L131】. This is trivial compared to Brexit’s estimated economic cost: a GDP reduction in the range of 4–5% in the long run relative to remaining in the EU【8†L125-L133】. In essence, losing virtually frictionless trade with a huge neighbor (EU) has not been offset by minor tariff reductions elsewhere. UK industries like automotive and agriculture now face higher trade costs to their biggest market (Europe), resulting in some output losses and investment shifts (e.g. Honda closed a UK plant in 2021, citing changing trade conditions).
In summary, the UK went from pioneering free trade (pre-1930) to a period of protection (1932-1970s) and back to integration/liberalization (joining the EU in 1973), with Brexit marking a partial reversal of liberalization. History shows that Britain’s prolonged protectionism mid-century coincided with economic underperformance【5†L187-L196】, while periods of openness (pre-1914, post-1973) saw stronger productivity and consumer benefits. Post-Brexit, the UK is in a new experiment – setting its own tariffs but with higher barriers next door – the outcomes of which will continue to unfold in growth and living standards in coming years.
Germany: Autarky to Export Powerhouse
Pre-WWII Protection and Crisis (1900s–1930s)
In the early 20th century, Germany (the German Empire until 1918) followed a protectionist trade policy, especially to shield agriculture and heavy industry. Germany had instituted high tariffs as far back as 1879 (Bismarck’s tariff) on grain to appease landowners. By the 1900s, German tariffs on manufactures and farm goods were significant (for instance, Germany’s average tariff on imported goods was about 25% in 1902)【3†L95-L100】. This helped foster German industries, which grew to rival Britain’s by the eve of WWI. However, high tariffs also meant Germany was vulnerable to external retaliation and had higeconomicsobservatory.comces than if it imported freely.
After WWI, the Weimar Republic initially lowered some barriers under international pressure, but the economic turmoil of the 1920s (hyperinflation, then the 1929 crash) led to renewed protection. During the Great Depression, Germany (under Chancellor Brüning, then under the Nazi regime after 1933) took extreme autarkic measures: imposing import quotas, exchange controls, and bilateral barter deals. By the late 1930s, Nazi Germany had effectively severed itself from the world trading system, aiming for self-sufficiency (“Autarky”) ien.wikipedia.org for war. Tariffs became less relevant than outright import prohibitions and state control of trade. This autarky protected some domestic production (synthetic rubber, ersatz foods), but at great cost: consumers had access to fewer goods (many imports like coffee were restricted), and resources were misallocated to inefficient substitutes. Quality of life under Nazi autarky actually deteriorated in terms of consumer welfare – many foodstuffs and consumer goods were rationed or unavailable, even before the war began.
One dramatic example of tariff impact earlier in this period was the effect of foreign tariffs on Germany’s farmers and exporters during the Depression. Smoot-Hawley in the U.S. hit German industry: for instance, American tariffs on goods like chemicals and machinery cut into Germany’s export earnings when it desperately needed foreign exchange to service debts. Germany responded with draconian trade controls. Ultimately, the collapse of global trade (world exports fell ~66% 1929–1933)【50†L1-L4】 compounded Germany’s economic misery – by 1932 German unemployment exceeded 30%. Thus, like in other countries, 1930s protectionism hurt Germany’s economy, contributing to the social crisis that facilitated the Nazi rise to power.
Post-WWII West Germany: Liberalization and the “Wirtschaftswunder” (1950s–1960s)
After WWII, Germany was divided. Here we focus on West Germany (Federal Republic), which became a showcase of trade-driven growth. Under Economics Minister Ludwig Erhard, West Germany in 1948 embarked on sweeping liberalization – abolishing most price controls and relaxing trade restrictions. West Germany joined GATT in 1951 and steadily lowered its tariffs. It was also a founding member of the European Coal and Steel Community (1951) and later the European Economic Community (1957). Within the EEC, West Germany eliminated tariffusitc.govnce, Italy, and the Benelux by 1968, creating a large free market. The EEC common external tariff was moderate (generally under 15% for industrial goods) and fell with each GATT round.
This openness was a key ingredient of the “Wirtschaftswunder” – West Germany’s economic miracle. From 1950 to 1960, West German industrial production quadrupled and exports boomed【34†L443-L451】【34†L483-L487】. German firms, exposed to competition, rapidly modernized. Industries like automotive, machinery, and chemicals became globally competitive exporters. Trade as a share of GDP rose substantially. Living standards climbed: by 1960 West Germans enjoyed full employment and access to a variety of affordable goods (including imports). Notably, food prices in Germany were kept reasonable partly by importing cheaper food and later by the EEC’s coordinated policies. West Germany’s embrace of free trade and export-oriented growth stands in contrast to Britain’s slower liberalization; by the 1970s West Germany’s productivity and income had surpassed the UK’s by a wide margin【5†L200-L204】.
One cannot overstate how dramatically West Germany benefited from open trade: backed by U.S. Marshall Plan aid and access to foreign markets, it transformed from the rubble of 1945 to the world’s #2 exporting nation by 1960. The average West German tariff on imports fell from pre-war highs to roughly 10% by the early 1960s, and continued downward. A 2015 study showed that by the 1960s, Britain’s tariffs were higher than West Germany’s, and Britain’s protected markets bred complacency, whereas West Germany’s firms thrived under competition【5†L187-L195】. This competition and export success translated into rising wages and consumer welfare in West Germany – exemplified by the spread of Volkswagen cars and Bosch appliances domestically and abroad.
In East Germany (GDR), by contrast, the Soviet-style planned economy kept trade mostly within the Communist bloc (COMECON). High tariffs and barriers existed between East and West. The GDR had decent industrial output but lagged in innovation and consumer goods. East Germans often faced shortages – a stark contrast to West Germany’s abundance. This divergence underscores how West Germany’s freer trade policy was linked to far better economic performance and living standards.
Globalization and European Union Era (1970s–2000s)
In the 1970s and 80s, West Germany (and after 1990, reunified Germany) continued to champion open trade. As part of the European Community, Germany supported tariff reductions in the Tokyo Round and the creation of the WTO in 1995. By the 1980s, German average tariffs on industrial goods were below 5%, effectively negligible in many sectors. German manufacturing did face tough competition from newly industrializing economies (Japan in cars and electronics; later East Asia). Rather than resorting to high tariffs, Germany focused on technological upgrading and moving up the value chain. There were some protective measures via the EU: for example, the EU imposed voluntary export restraints on Japanese cars in the early 1980s, which helped European (including German) automakers maintain market share at home. Also, the Common Agricultural Policy (CAP), strongly backed by France but accepted by Germany, kept high external tariffs on food imports (sometimes 20–100% on dairy, meat, etc.) to support European farmers. This meant German consumers paid more for some food items than world prices – a quality of life cost – but it ensured stable farm incomes and rural development in the European community. Germany, being less agriculture-centric than France, was more ambivalent about such protection but went along for the sake of European unity.
During the Reagan era, the U.S. imposed some tariffs (e.g. on steel, machine tools) that affected German exports; Germany usually sought resolution via negotiations or the GATT rather than retaliating unilaterally. A notable case: U.S. steel tariffs in 2002 – the EU (with Germany’s support) prepared a retaliatory list targeting politically sensitive U.S. goods (Florida oranges, etc.), and the WTO authorized EU retaliation, pressuring the U.S. to drop the tariffs【26†L238-L247】. This demonstrated Germany’s commitment to the rules-based system: it worked through the EU and WTO to address unfair U.S. tariffs, rather than raising its own tariffs arbitrarily.
Reunification in 1990 integrated East Germany into the Federal Republic and thus into the EC’s trade regime. Overnight, East Germany went from a high-tariff closed market to a completely open one with the West. The immediate impact was severe deindustrialization in the East – many uncompetitive factories shut when exposed to global competition – causing a sharp spike in unemployment in the early 1990s. However, massive investment and subsidies eventually rebuilt the Eastern economy, and consumers there benefited from access to a full range of modern goods. By the 2000s, all of Germany was a highly open economy; exports were about 40% of GDP (far higher than in the U.S. or UK). German living standards were among the highest globally, supported by a strong export sector (autos, capital equipment) and affordable imports keeping inflation low.
Recent Years: Trade Conflicts and Adjustments (2010s–2024)
In the past decade, Germany’s commitment to free trade has occasionally been tested by global tensions. The Eurozone crisis and rise of populism brought some pressure for protection, but Germany largely resisted. However, the 2018 U.S.–China trade war indirectly hit Germany: Chinese tariffs on U.S. goods benefited some German exporters (e.g. soybeans), but the general slowdown in world trade hurt Germany’s export-driven economy. When the U.S. under Trump also threatened tariffs on European cars and imposed steel/aluminum tariffs, Germany (through the EU) retaliated in a measured way (tariffs on $3.2 billion of U.S. goods in 2018)【57†L25-L33】. Germany was keen to avoid escalation, knowing a full trade war would harm its automakers significantly (the U.S. is a key market). Tensions de-escalated by 2020, and plans for U.S. auto tariffs were shelved.
Germany has also been involved in shaping EU trade policy: supporting new free trade agreements (with Korea, Canada, etc.) that lower tariffs abroad. German industry generally favors these deals since they open markets for its exports. In 2022, the EU (including Germany) struck a deal with the U.S. resolving a dispute over steel tariffs in favor of quota arrangements, lifting some retaliatory EU tariffs.
Today, Germany’s average applied tariff (via the EU common tariff) is very low, about 1.8% on industrial imports and a bit higher on agricultural goods. The country remains one of the biggest beneficiaries of globalization – its large current account surplus attests to strong export performance. German workers in export industries enjoy high wages, though there is criticism that reliance on exports makes Germany vulnerable to external shocks. When global trade dipped (as in the COVID-19 pandemic), Germany’s economy was hit but rebounded with trade recovery.
In summary for Germany: A protectionist-autarkic phase pre-1945 corresponded with economic hardship and stagnation, while the post-1950 liberal trade regime fueled an economic miracle and decades of prosperity. German industries became globally dominant without high tariffs, relying instead on quality and innovation. Occasional targeted protection (often at the EU level) provided breathing space (e.g. CAP for farmers, quotas on Japanese cars), but Germany largely avoided the trap of blanket tariffs. Its high living standards and export success illustrate the long-term gains from openness, while its brief episodes of protection (1930s, and East Germany era) underscore the costs of cutting oneself off from global trade.
Japan: From Protective Isolation to Export Miracle
Early 20th Century: Limited Tariff Autonomy and Early Protection
At the start of the 1900s, Japan was a newly industrializing nation with constrained trade policy. Treaties with Western powers (since the 1850s) had limited Japan’s tariff rates (to around 5%) – a form of imposed free trade. In 1911, Japan regained tariff autonomy and promptly raised tariffs to protect its growing industries (textiles, steel). By the 1920s, Japan had moderate tariffs in place and was exporting goods like silk, cotton textiles, and pottery. Tariffs were a key tool in Japan’s “infant industry” strategy – shielding nascent manufacturers from European competition. This strategy showed success in sectors like cotton textiles, where Japan became globally competitive by the late 1920s.
However, Japan was highly dependent on exports for vital imports (like oil, metal). When the Great Depression hit, Japan was gravely impacted by other countries’ tariffs. Notably, the U.S. Smoot-Hawley Tariff of 1930 included a smoothly devastating duty on silk, Japan’s largest export. U.S. raw silk imports from Japan fell sharply (the Smoot-Hawley tariff cut Japanese silk exports by about half in value)【32†L41-L48】. Given that over one-third of Japanese farm families raised silkworms, this collapse delivered a heavy blow to rural incomes. Aggregate demand in Japan fell ~18% from 1929 to 1931【32†L43-L50】, contributing to mass unemployment and social unrest. In response, Japan took drastic steps: it devalued the yen in 1931 (going off gold) to make exports cheaper, and it pursued an aggressive imperial policy to secure markets and resources (invasion of Manchuria in 1931). Tariffs and trade controls became part of an autarkic war economy in the late 1930s. By 1936, Japan had high tariffs or outright quotas on many imports (to conserve foreign exchange for strategic goods). This helped certain domestic industries (e.g. Japan fostered its own machinery and aircraft industry behind these walls), but overall the late-1930s Japanese consumer faced a scarcity of imported goods and high prices. Quality of life deteriorated as military needs dominated – consumer goods (like imported foods, luxuries) virtually disappeared and rationing begtheguardian.comre WWII.
Post-WWII Occupation and Export-Led Growth (1950s–1970s)
After WWII, Japan was occupied by the U.S. (1945–1952), during which time many economic reforms occurred. Initially, U.S. advisors pushed Japan towards a free market and low tariffs, but Japan’s government also looked to protect key industries to rebuild. In the 1950s, Japan implemented a dual strategy: participate in GATT (joined 1955, committing to gradually lower tariffs) but also use industrial policy and informal trade barriers to nurture sectors. Japan’s tariffs on industrial goods did come down significantly over this period – by 1960, about 41% of import categories were fully liberalized (up from 22% in 1956)【35†L37-L45】, and the government aimed for ~80% liberalization by the mid-1960s (though with some backtracking)【35†L37-L45】. Non-tariff barriers (licensing, etc.) filled the gap in many cases. For example, automobiles: Japan kept foreign cars at bay more by strict standards and a weak distribution network than by high tariffs (formal auto tariffs were eventually zero).
This careful opening paid off in an economic miracle. From 1955 to 1973, Japan’s economy grew ~9–10% annually【34†L483-L487】 – the fastest in the world. Exports exploded, especially of textiles in the 50s, then electronics and machinery in the 60s. Japan’s share of world exports rose from <1% in 1950 to over 6% by 1970. Tariff policy facilitated this by ensuring Japanese firms could import raw materials and equipment cheaply (boosting their competitiveness), while the domestic market for finished goods remained somewhat sheltered until firms could stand on their own. By the late 1960s, Japan had largely caught up technologically and began lowering many remaining barriers. In 1964, Japan joined the OECD and accepted IMF Article VIII (making the yen convertible), signaling confidence in liberalization.
A notable holdout was agriculture. To this day, Japan has protected its farmers with steep tariffs and import quotas. Rice, the staple crop, is emblematic: Japan essentially banned rice imports after WWII. Even after agreeing to minimum market access in the 1995 Uruguay Round, Japan applied a nearly 778% tariff on rice above the quota【41†L1-L8】 – effectively shutting out foreign rice to protect hundreds of thousands of small rice farmers. This kept domestic rice prices extremely high (Japanese consumers paid several times the world price for rice), an explicit trade-off to preserve rural livelihoods and cultural tradition. So while Japan embraced free trade in manufacturing, it maintained first-world protectionism in agriculture. This raised food costs (a quality of life issue – Japanese household food expenditure was high), but successive governments deemed it politically necessary.
During the 1970s, Japan faced trade friction as it ran big trade surpluses. The U.S. accused Japan of maintaining an implicit closed market (through regulations, keiretsu networks, etc.). Though Japan’s average tariffs were low by then (under 5% on industrial goods), foreign companies found it hard to penetrate some sectors (autos, electronics). Under pressure, Japan undertook “voluntary” export restraints – e.g. limiting auto exports to the U.S. in 1981 – to avert punitive tariffs from trading partners. These measures were a double-edged sword: they short-term appeased foreign concerns and delayed formal tariffs, but they also spurred Japanese firms to invest abroad (building car plants in America), further eroding the rationale for tariffs. Domestically, by the 1980s Japanese consumers started clamoring for cheaper imports (the prices in Japan for many items were famously high – the “price differential” problem). The government responded with gradual liberalization of retail and import rules, which, along with the strong yen after 1985 (Plaza Accord), made imports cheaper. Japanese inflation remained low and quality of life improved as imported luxury and consumer goods became more available by the late ’80s.
Challenges and New Trade Paradigms (1980s–2000s)
In the 1980s, Japan’s meteoric export success (especially in autos and semien.wikipedia.orgcato.orgtrade spats. The U.S. imposed a 100% tariff on certain Japanese electronics in 1987 as retaliation for alleged semiconductor dumping – a rare direct tariff confrontation that was quickly resolved by a tech agreement. Japan learned to be more proactive in trade diplomacy to avoid tariffs: it opened its market to more cars from Europe/U.S. (though imports remained small), and by the 1990s it cut or eliminated tariffs on most manufactured imports. When the WTO launched in 1995, Japan was a founding member and by then one of the most open advanced economies in tariff terms.
Yet some structural outcomes of earhoweandrusling.comion lingered. The agriculture sector remained inefficient – small rice farms persisted thanks to tariff shelter, contributing to very high production costs (hence the 778% rice tariff). Consumers effectively subsidized farmers via higher food prices. Another effect: Japan’s protected home market in the 60s–80s allowed a multitude of domestic firms to thrive (e.g. in electronics, Japan had dozens of appliance brands). By the 2000s, however, global coeconomicsobservatory.com an aging population forced consolidation – many Japanese consumer electronics firms lost out to Korean and Chinese rivals, and one could argue that earlier protection delayed this reckoning at the cost of long-run agility.
In the 1990s and 2000s, Japan experienced economic stagnation (the “Lost Decades”), but tariffs were not a major cause – if anything, Japan was *tootheguardian.come globally (persistent trade surpluses). To revitalize growth, Japan even considered more imports to stimulate domestic demand. Tariffs continued to fall via multilcato.orgateral deals. For example, Japan signed bilateral free trade agreements (FTAs) with nations like Thailand and Mexico in ttaxfoundation.orglowering tariffs on both sides (including gradual opening of agriculture in some cases). Japan’s average applied tariff by 2010 was about 2% overall (with industrial goods ~0%–5% and agricultural goods higher but covered by quotas). Japanese policymakers also began to address non-tariff measures – for instance, improving transparency in standards – to make Japan’s market more accessible.
Recent Developments and Outlook (2010s–2024)
In the last decade, Japan has remained a proponent nber.orgen.wikipedia.orger, stepping up as a leader of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) after the U.S. withdrew. CPTPP (enacted 2018) commits Japan to further tariff cuts, even in agriculture (though with exceptions and phase-ins). Japan also inked an FTA with the EU in 2019, eliminating nearly all tariffs between them. These deals indicate Japan’s strategy to secure export markets and diversify import sources through reciprocal tariff elimination. Japanese consumers have started seeing slightly lower prices on foods like beef, cheese, and wine as tariffs on those were cut under the FTAs.
One trade conflict Japan faced recently was not tariff-driven but a 2019 dispute with South Korea involving export controls on high-tech materials (used in semiconductors). While not tariffs, this tit-for-tat showed Japan can still engage in trade restrictions for strategic reasons, which can disrupt industries (South Korea responded by boycotting Japanese goods, affecting Japanese beer and auto sales there). This case is more geopolitical, but it echoes how protection can spill into broader economic costs.
When the U.S. imposed steel and aluminum tariffs in 2018, Japan, unlike the EU or China, did not retaliate with tariffs. It negotiateen.wikipedia.orgor some products and waited for a multilateral resolution. This restraint showeconomicsobservatory.comioritization of alliance relations over immediate retaliation – but Japanese steel exporters still lost some U.S. business, and domestic steel prices rose slightly due to diverted global steel. Additionally, U.S. tariffs on Chinese goods indirectly benefitted some Japanese firen.wikipedia.orgreplace Chinese suppliers in the U.S.), while Chinese retaliation against the U.S. (e.g. on agriculture) had minor positive spillovers (cheaper soy imports for Japan). Overall, the recent trade wars have had mixed, relatively minor effects on Japan’s economy, compared to say Germany or Korea which are more export-dependent on the warring parties.
Quality of life in Japan by 2024 is high, with a broad array of imported products available at reasonable prices (though still higher than in the U.S. for some categories, partly due to distribution inefficiencies and remaining tariffs on food/clothing). Unemployment is low. The remaining protection in Japan mainly affects its rural communities and some traditional sectors. Moen.wikipedia.orgen.wikipedia.orgc challenges outweigh tariff issues for Japan’s economy. In sum, Japan’s historical trajectory shows strategic use of tariffs in early development helped it industrialize, but once it became an advanced economy, integration into global trade (with low tariffs) was crucial to its prosperity. Japan’s export-led growth could not have happened if other countries kept high tariffs – so it benefited enormously from the global move to freer trade, while at home it dropped most tariffs except in politically sensitive areas.
France: Protectionist Tradition and Modern Transformation
Early 20th Century Protectionism (1900–1930s)
France historically favored more protection than Britain but less than tariff-heavy nations like the U.S. In 1892, France passed the Méline Tariff, raising duties on grains and industrial goods to shield farmers and manufacturers from foreign competition (this came after a period of relatively lower tariffs under the 1860 Anglo-French trade pact). Thus, entering the 20th century, France had a moderate-to-high tariff regime – roughly 20–30% average on many imports【3†L95-L100】. This helped certain sectors (French agriculture remained largely small-scale but was sheltered from cheaper overseas grain; industries like textiles and steel had guaranteed home markets). But it also meant French consumers paid more for food, and French export industries (like luxury goods or wine) faced retaliation abroad.
After WWI, France raised tariffs further. In 1928, facing postwar reconstruction needs and a desire to stabilize the franc, France enacted a new tariff and quota law, becoming the first major country in that era to turn sharply protectionist【1†L201-L207】. By 1en.wikipedia.orgcato.org and even import quotas on products ranging from wheat to automobiles. When the Great Depression struck, France initially lagged in feeling its effects (the French economy dipped later, around 1931). But as global demand fell and trade partners devalued currencies, France’s exports slumped and imports surged (due to an overvalued franc). Rather than devalue immediately, France resorted to even more protection: new quotas in 1931–1932 and increases in tariffs to block imports and protect gold reserves.
Economic outcomes: These measures insulated some domestic jobs (e.g. French farmers were buffered from collapsing world grain prices), but overall, France experienced a very deep and prolonged depression. Industrial output fell and unemployment rose (though France didn’t measure joblessness as precisenber.orgnber.orgment exceeded 15% by mid
ion did not prevent the failure of major companies – e.g. some banks and steeen.wikipedia.orgen.wikipedia.orgause the root problem wcato.orgdemand. In fact, tariffshistory.state.govworsened the downturn** by raising prices and stifling trade. By 1936, France finally devalued economicsobservatory.comer the Popular Front government, en.wikipedia.orgen.wikipedia.orgn alone could not restore compen.wikipedia.orgolitically, the protectionist era coincided with social turmoil and sen.wikipedia.org policy.
A notabaeaweb.orgtaxfoundation.orgFrench wine sector* benefited obr.ukariffs on foreign wines, securing the domestictheguardian.com faced reduced export opportunities as other countries raised tariffs on wine (e.g. the UK did so in retaliation). Similarly, French luxury textile producers were hurt when the U.S. and others raised tariffs on silk and fashion goods. So, while France tried to shield itself, it was squeezed by the global collapse in trade – world trade fell ~66% between 1929 and 1934【50†L1-L4】, and France, as the world’s 4th largest economy then, could not escape the drag.
Post-World War II: Controlled Opening and European Integration (1940s–1960s)
After WWII, France was economically exhausted and needed to rebuild. The French government under De Gaulle and others adopted a policy of “dirigisme” – state-led development – which included trade policy as a tool. In the late 1940s, France maintained import quotas and high tariffs to protect nascent industries (cars, aircraft) and ensure self-sufficiency in food. However, France also realized the value of cooperation. It was a prime mover in the European integration project, which began sectorally with the European Coal and Steel Community (ECSC) in 1951 (eliminating tariffs/quotas on coal and steel among six nations). French industry benefited from this – for example, its steel firms gained access to German coal and Italian markets, allowing economies of scale.
In 1957, France co-founded the European Economic Community (EEC) via the Treaty of Rome. The EEC required members to eliminate internal tariffs over 12 years and adopt a common external tariff (CET). France, with protectionist instincts, agreed because it sought guaranteed export markets in Europe for its farms and industries. Throughout the 1960s, intra-EEC tariffs fell to zero, spurring a boom in trade among members. French trade within Europe surged, forcing French companies to become more efficient. Many adapted well – e.g. Renault and Peugeot expanded their car exports to Italy and Germany. The CET that France helped design was moderately protective: about 12% on manufactures on average, higher on specific items. This CET actually raised tariffs on some imports to France from outside (e.g. French tariffs on U.S. cars went up to the common rate), while lowering tariffs on others (if France’s pre-EEC rate was higher than the CET, it had to drop to the common rate). On balance, France’s market became more open to Europe but a bit more closed to some non-Europe sources.
The signature policy of the EEC that particularly mattered for France was the Common Agricultural Policy (CAP), launched in 1962. France, with its large farming sector, was a strong proponent. CAP established high import tariffs and intervention prices for agricultural products – effectively guaranteeing high prices for European farmers and imposing tariffs/levies on imports to prevent cheaper foreign produce from undercutting them. For example, CAP support meant French dairy and grain farmers were assured prices often 2× world market levels, with tariffs on imported dairy, meat, cereals often exceeding 100% in the 1960s–80s. This was a protectionist win for French agriculture: farm incomes rose and France became a leading exporter of wine, cheese, etc., within a protected European market. French consumers and taxpayers bore the cost (higher food prices and budget funds for CAP). But politically, it preserved the rural way of life and made France a surpl us producer (from being a net food importer prewar). The CAP is often cited as an example of successful protectionism in that it achieved its goal of food self-sufficiency and farm stability, though with inefficiencies and international criticism (e.g. “butter mountains” and “wine lakes” of surplus).
Economic growth: The 1950s-60s were the Trente Glorieuses (30 glorious years) of growth for France. Trade liberalization within Europe and a generally expanding world economy (with GATT-led tariff cuts globally) contributed to France’s ~5% annual GDP growth and rapidly rising living standards. French industrial productivity climbed as firms like Citroën, Michelin, and Saint-Gobain modernized behind the tariff wall of the EEC, but also facing competition from German and Italian firms (no protection within the EEC). By 1970, France’s GDP per capita had nearly caught up with Britain’s, reversing the pre-war gap, and French consumers enjoyed a higher variety of goods – from Italian appliances to American electronics – thanks to trade (France maintained lower tariffs on U.S. goods than Britain did until 1973). The presence of foreign firms in France (like American companies taking advantage of the common market) also increased, which had been facilitated by tariff removal in the EEC.
Industrial Adjustments and Global Trade (1970s–1990s)
The post-1973 period brought new challenges: oil shocks, recessions, and rising competition from Asia. In the 1970s, under economic stress, France flirted with protectionist ideas again. The government of the early 1980s (President Mitterrand’s socialist administration) initially attempted a kind of nationalist economic policy – including import deposit schemes and buy-French campaigns – but these had limited effect and were rolled back as France recommitted to the European project (completing the EU Single Market by 1992). Full-blown tariff increases were constrained by France’s EEC commitments; instead, France used subsidies and state ownership to support industries (like rescuing failing carmaker Renault, or aerospace firm Dassault). Trade barriers were occasionally used in specific cases: for example, France in 1982 imposed quotas on Japanese video cassette recorders (VCRs), mandating they be imported through one entry point (Poitiers) – a bureaucratic tactic to slow imports. This was a short-term protection for French electronics firms (Thomson), though ultimately it only delayed the inevitable dominance of Japanese electronics.
Within the EU, France joined collective actions to address import surges. One prominent issue was textiles and apparel – under the Multi-Fiber Arrangement (MFA), European countries including France imposed quotas on imports from developing countries (like China, India) to protect domestic textile jobs. This did slow the decline of French textile production in the 1970s–80s, but not reverse it; many French textile mills still closed, albeit perhaps more gradually than they would have under free trade. By the 1990s, these quotas were being phased out via the WTO, and the French textile industry had largely shifted to higher-end fashion or disappeared from commodity segments. Similarly, French steel underwent painful restructuring in the 1980s (e.g. the collapse of Lorraine steel industry) – trade protection was attempted via EU agreements limiting steel imports, but ultimately technology and low-cost competition meant significant job losses that tariffs only briefly postponed.
Meanwhile, French exports thrived in many high-value sectors: aerospace (Airbus, with government support, managed to break into markets dominated by U.S. Boeing – partly aided by occasional U.S.-EU agreements to limit subsidies rather than impose tariffs), luxury goods (LVMH, etc., benefiting from rising global incomes and low tariffs in destination markets), and power equipment (Alstom, etc.). The European Single Market after 1992 eliminated remaining internal non-tariff barriers, further boosting efficiency of French firms who now operated in a truly continental market. France also became a major beneficiary of the EU’s external trade deals and the WTO’s global tariff reductions (Uruguay Round 1994). By 2000, French tariffs (via the EU) on industrial goods were typically under 4%, enabling French consumers to enjoy inexpensive imports (electronics, clothing – after MFA ended, cheap Asian clothing lowered prices, benefiting consumers but pressuring the last French garment factories).
A significant industry-level event was the decline and partial rebirth of the French automobile industry. In the 1980s, imports of Japanese cars grew (Japanese makers were very competitive). France, through an EU-wide gentlemen’s agreement, capped Japanese car imports to a small share of the market until 1999. This protectionist measure (along with Italy and UK’s similar stance) gave Peugeot, Citroën, and Renault time to restructure and improve quality. It can be argued this was a protectionist “win”, as French automakers survived and eventually thrived – by the 2000s, Renault-Nissan and PSA were global players – but by then the market was open and they had to compete on merit. French consumers in the 1980s probably paid more or had fewer choices due to limits on Japanese cars (which were highly desired for their reliability), indicating a short-term cost to quality of life in exchange for saving domestic auto jobs. Today, French carmakers remain, but competition from Asian and other European producers is fierce, and tariffs in Europe are low (10% on cars from non-EU, likely dropping with new trade deals).
21st Century: EU Leadership and Ongoing Debates (2000–2024)
As one of the largest EU economies, France has considerable influence on EU trade policy. In general, France supports free trade agreements but also insists on “reciprocity” and protecting certain sensitive sectors. For instance, France was initially wary of the EU-Mercosur trade deal (concerned about a flood of South American agricultural imports hurting French farmers). France has pushed for mechanisms to enforce environmental and labor standards via trade (a form of indirect protection). It also was a big advocate for the EU’s anti-dumping duties on cheap imports (like Chinese steel or solar panels in the 2010s) to defend European industries from unfair competition. These duties (often ranging 10–40%) provided relief to sectors like steel and solar panel producers in the EU, including any French firms, though they risk raising costs for downstream users.
One notable confrontation has been the long-running Boeing-Airbus WTO case: the U.S. and EU accused each other of unfair subsidies. In 2019–2020, the WTO allowed the U.S. to impose tariffs on EU exports (incl. French products like wine and cheese) and the EU to impose tariffs on U.S. exports in retaliation. The U.S. levied a 25% tariff on French wines in 2019, which hit French vintners hard (U.S. sales dropped, some small wineries faced bankruptcy). The EU retaliated with tariffs on aircraft and agricultural goods from the U.S. This mini trade war was resolved in 2021 with a truce suspending these tariffs【57†L25-L33】. The episode showed that even in modern times, tariffs can significantly impact specific industries: French wine exporters lost an estimated $400 million in orders during the tariff period, and some feared losing long-term market share. Fortunately, the removal of these tariffs allowed a rebound.
Within France, there is ongoing sensitivity about globalization. French public opinion often favors protecting cultural industries (like limiting Hollywood film imports or Amazon’s impact on books – done via quotas or regulations rather than tariffs per se). While tariffs on goods are low, France sometimes effectively “protects” sectors through regulations (for example, strict food safety rules that keep out some GMO crops or hormone-treated beef from the U.S., leading to trade disputes). These measures can be controversial – trading partners view them as disguised protectionism, while France views them as reflecting societal values (health, culture).
As of 2024, France’s trade is overwhelmingly conducted under EU agreements, meaning average French tariffs are those of the EU: about 0% on intra-EU trade and a weighted average of ~3% on extra-EU imports (higher on agriculture). Exports plus imports equal around 60% of French GDP, reflecting deep integration. Quality of life in France benefits from this open trade: consumers have access to affordable imported goods (e.g. electronics, clothing) thanks to low tariffs, and major French employers (Airbus, Louis Vuitton, etc.) thrive in export markets. The flipside is exposure to competition – some French industries (like electronics manufacturing) have all but vanished. The government addresses this not with tariffs, but with industrial strategies and EU-wide measures (like safeguard tariffs allowed by WTO in sudden import surges, or investment in innovation to make French products more competitive).
Summary for France: France’s experience demonstrates the balance between protection and liberalization. Early 20th century protection gave short-term support to farms and factories but could not prevent the Depression’s impact and may have slowed long-run growth. After WWII, partial liberalization within a protected bloc (the EEC) enabled France to modernize and prosper – a clever blend of competition and shelter (e.g. free trade inside Europe spurred efficiency, while the common external tariff and CAP shielded strategic sectors). Over time, France shed most tariff protection except for agriculture, and became a high-tech, service-oriented economy where competitiveness matters more than tariffs. Periodic protectionist measures (textile quotas, electronics import limits, etc.) offered temporary respite to industries but generally did not fundamentally alter global trends – industries had to adapt or decline despite these measures. French consumers have typically borne the cost of protection (through higher prices) but have also enjoyed the gains of free trade (more affordable goods and higher purchasing power). As part of the EU, France today champions a rules-based trade system but with carve-outs for cultural and agricultural exceptions. The overall lesson is that France’s most dynamic growth occurred when it embraced broader markets (Europe, global) rather than when it tried to close off. Still, France has used tariffs and trade rules as a policy lever to achieve certain social goals, reflecting the idea that economic welfare isn’t measured only by efficiency but also by stability and equity, a balance that continues to evolve in French trade policy.
Conclusion
Over the span of 1900 to 2024, the tariff policies of the United States, United Kingdom, Germany, Japan, and France have profoundly influenced their economic trajectories and living standards. Several clear patterns emerge from this historical and empirical analysis:
- High Tariffs in Economic Downturns: In the interwar period, across all five countries, tariff spikes coincided with economic distress and often exacerbated it. The U.S. Smoot-Hawley tariff and global retaliation caused world trade to contract by two-thirds, deepening the Great Depression【1†L183-L188】【49†L123-L131】. Likewise, Britain’s turn to tariffs in 1932 gave short-term relief but did not prevent high unemployment, and France’s protection in the 1930s failed to avert a prolonged slump. These cases underscore that beggar-thy-neighbor tariffs can be self-defeating, as shrinking export markets and higher import costs transmitted pain economy-wide.
- Tariffs as Industrial Policy: Tariffs have at times functioned successfully as industrial policy tools under specific conditions. In late-19th/early-20th centuries, U.S. and German economic growth was robust behind high tariff walls, nurturing their manufacturing bases【22†L69-L77】. Japan’s post-Meiji and early post-WWII strategy of selective protection helped incubate globally competitive industries. However, these successes were often in catch-up phases and were accompanied by other critical factors (investment in education/infrastructure, scale of internal market, etc.). Over-reliance on protection long-term tended to breed inefficiency (e.g. Britain’s lagging productivity mid-century, when it was slow to dismantle tariffs【5†L187-L195】).
- Retaliation and Trade Wars: All five countries’ experiences show that tariffs invite retaliation, which can nullify intended benefits. The U.S.–EU and U.S.–China trade conflicts of recent years mirror this: each side’s tariffs hurt the other’s exporters and led to counter-tariffs (American whiskey and French wine producers both lost sales due to mutual tariffs)【57†L25-L33】. During the 1930s, U.S., British, and French tariffs prompted other nations (including Germany and Japan) to raise theirs, in a spiral that devastated global trade【49†L123-L131】. Modern economic modeling consistently finds that trade wars reduce overall output and employment compared to free trade【30†L1-L8】 – a lesson evidenced by historical data.
- Long-Term Benefits of Liberalization: The post-1945 period of widespread tariff reductions saw remarkable economic growth and improvement in quality of life in these advanced economies. The formation of the GATT/WTO and regional blocs (EEC/EU, NAFTA) created a stable trade environment where tariffs gradually fell to historically low levels (average tariffs in these countries dropped from ~20–30% in 1947 to low single digits by the 2000s)【20†L7-L15】【58†L1-L4】. In this environment, all five countries experienced rising productivity and incomes. West Germany and Japan achieved “miracles” in the 1950s–60s, the UK caught up after joining the EU, and the U.S. enjoyed long expansions with low inflation partly thanks to cheap imports. Consumers benefited enormously – a greater variety of goods at lower prices – effectively raising real living standards. For example, by the 1990s, clothing and electronics (industries once protected) became far more affordable in real terms in the U.S. and Europe due to global sourcing and low tariffs. Employment shifted: some industries shrank (textiles, shipbuilding), but new sectors (tech, finance, creative industries) grew, often supported by export markets.
- Short-Term vs Long-Term Trade-Offs: Tariffs often provided short-term protection for specific sectors or regions but at a long-term cost. The U.S. steel tariffs of 2002 and 2018, the UK’s 1930s general tariff, and France’s agricultural tariffs each delivered immediate relief to targeted groups (steelworkers, interwar British factories, French farmers) – preventing bankruptcies or social unrest in the short run. However, the broader economy usually bore higher costs (job losses in steel-consuming industries【26†L247-L255】, higher consumer prices, lower productivity growth due to reduced competition【5†L187-L195】). Over extended periods, industries that relied on perpetual protection tended to decline anyway (often failing when exposed to competition later). By contrast, industries that used protection as a temporary bridge to restructure (e.g. Harley-Davidson motorcycles in the 1980s【46†L132-L140】, or some European carmakers mid-20th century) and then competed globally ended up stronger. Thus, the context and duration of tariffs matter – used sparingly and with reform, they can aid adjustment; used persistently, they risk stagnation.
- Quality of Life Impacts: Tariff policy has influenced everyday life, especially via prices and employment. High tariffs generally mean higher prices for consumer goods, acting like a regressive tax on households. For instance, in early 20th-century America, tariffs on clothing and shoes (often 30%+) made these staples pricier; today, even with low average tariffs, the U.S. still imposes some high tariffs on those items, which studies show hits low-income consumers the hardest【24†L149-L157】【58†L1-L4】. On the other hand, sudden trade liberalization can disrupt communities – e.g. U.S./UK factory towns in the 1980s–2000s saw job losses due to import competition (a quality of life decline for those affected). The historical record suggests the optimal path is gradual, negotiated tariff reduction paired with domestic policies (education, regional development) to ease transitions. All five countries now have extensive social safety nets in part because policymakers recognized trade creates winners and losers; tariffs were once a main tool to protect losers, but in modern economies, direct social support is seen as more efficient.
In conclusion, across the United States, United Kingdom, Germany, Japan, and France, the 20th century started with prevalent protectionism and ended with an unprecedented level of trade openness. Each country’s mix of tariff imposition and removal has played a role in shaping its economic structure. The short-term impacts of tariffs can be positive for specific industries (preventing collapse, saving jobs) but frequently at a net cost to the broader economy and consumers. The long-term impacts lean towards improved national prosperity when tariffs are low and trade is open – as innovation, competition, and comparative advantage have space to operate – versus relative decline when high tariffs shield economies from competition for too long. Credible data and historical outcomes support this: for example, trade liberalization in the post-war decades is estimated to have added significantly to GDP growth in industrialized countries, whereas the 1930s protectionism is estimated to have cut global GDP by several percentage points from what it could have been【1†L183-L188】【49†L123-L131】.
Looking forward, the lessons from 1900–2024 suggest that while targeted tariffs might be useful in addressing unfair trade or aiding adjustment, a return to broad protectionism in advanced countries would likely reduce national economic welfare and risk tit-for-tat retaliation. The experiences of these five nations affirm the principle that open, rules-based trade coupled with smart domestic policies leads to better economic and social outcomes than protectionism in the long run. Each country’s challenge is to manage globalization’s effects in an equitable way without erecting harmful barriers, a balance that the historical record shows is difficult but vital to achieve for sustained prosperity.
Sources:
- Historical tariff rates and trade impacts: League of Nations; World Bank; Bown & Irwin (2015)【20†L7-L15】【20†L41-L49】; U.S. Census/USITC data【13†embed_image】; WTO archives.
- Great Depression trade collapse: Wikipedia (Smoot-Hawley)【1†L183-L188】【52†L1-L4】; Cato Institute analysis【49†L123-L131】; U.S. State Dept. history【18†L13-L22】.
- Post-WWII liberalization and growth: OECD reports; Crafts (2012, 2018) on UK productivity【5†L187-L195】; German “Wirtschaftswunder” data【34†L443-L451】【43†L176-L184】; Japan economic miracle stats【34†L483-L487】.
- Modern tariff impacts: USITC and academic studies on 2002 steel【26†L247-L255】 and 2018 tariffs【28†L99-L107】【30†L1-L8】; UK Brexit analyses (OBR, 2021)【6†L29-L37】; WTO dispute records on Airbus/Boeing tariffs【57†L25-L33】.