President Trump’s sweeping new tariffs, announced yesterday, signal not just their embrace as a negotiating tactic, but a dramatic reordering of the global economy—one that could reshape entire industries and redefine how the country competes, trades, and grows.
As the United States drifts further toward protectionism, with growing bipartisan support for tariffs and industrial policy, it is worth remembering a cautionary tale from 20th-century development economics. Two regions—Latin America and East Asia—faced similar postwar challenges, yet took starkly different paths. One embraced tariffs and import substitution; the other, global markets and export discipline. The outcome was a decades-long divergence in growth and prosperity. Today, the U.S. risks forgetting which path led to dynamism and which to meager growth.
