Why people think tariffs can help

The infant-industry argument is simple and intuitive: new industries may need temporary shelter from world competition while they learn, reach scale, adopt technology, and get more productive. If you expose them immediately to global rivals with mature factories and deeper pockets, they may never get off the ground. Tariffs can:

• Give domestic firms breathing room to reach minimum efficient scale.

• Create incentives for local suppliers and upstream industries to develop.

• Raise government revenue that can be ploughed into infrastructure, skills, or R&D that support industrialization.

• Allow governments to pursue strategic goals (e.g., build an electronics base, heavy industry, or green manufacturing) rather than relying only on market signals.

Historical narratives about late-industrializers like the U.S., Germany, Japan and — in the 20th century — the East Asian tigers emphasize selective protection plus active industrial policy as part of their success stories. But note: these countries rarely relied on blanket tariffs forever; they combined protection with export push, state coordination, and learning targets. 

Why tariffs often backfire

Empirical work and recent policy analysis show clear pitfalls. Tariffs can easily produce:

• Inefficiency and higher prices. Protected firms face less competition and therefore have weaker incentives to innovate or cut costs; consumers pay more. Cross-country studies link long spells of protection to lower productivity growth. 

• Rent-seeking and capture. Firms lobby to keep protection, political coalitions form, and temporary measures become permanent. That’s how import-substitution regimes in some Latin American countries became stagnation traps.

• Retaliation and trade diversion. Higher tariffs invite counter-measures or shift trade toward higher-cost suppliers, hurting export competitiveness. Recent episodes show developing countries suffer heavily when big powers raise tariffs.

• Macroeconomic harm. Tariffs can be inflationary and reduce the efficiency of labor allocation, sometimes contributing to slower overall growth. 

What the evidence actually says

The modern empirical literature is nuanced. Broad cross-country evidence warns that long-term, undisciplined protection tends to reduce growth and welfare. But careful industry-level and case-study research shows that time-bound, targeted industrial policy — sometimes including tariffs — plausibly helped South Korea and other East Asian economies build advanced manufacturing capabilities. The difference lies in design, complementary policies, and institutions. Recent IMF and academic work emphasize the conditional success of industrial policy rather than a blanket endorsement of protectionism. 

Key conditions that make tariff-led industrial policy more likely to succeed

If a developing country is thinking of using tariffs as one tool toward industrial growth, the following elements matter a lot:

1. Clear, time-bound objective. Tariffs must be temporary with explicit sunset clauses and measurable performance benchmarks (productivity gains, export competitiveness, R&D targets).

2. Selective and targeted application. Target sectors where learning-by-doing and scale economies are plausible, not broad protection of low-value activities.

3. Complementary policies. Tariffs alone rarely build competitiveness. Pair them with subsidies for R&D, workforce training, infrastructure, export promotion, and access to finance.

4. Strong governance and anti-capture mechanisms. Transparent rules, regular reviews, and independent evaluation reduce the risk of permanent rent extraction.

5. Export orientation or credible exit strategy. Successful cases combined protection with an eventual push into exports; domestic protection that never leads to export competitiveness is a red flag.

6. Macro and trade diplomacy awareness. Policymakers must manage exchange-rate, fiscal, and diplomatic implications to avoid harmful retaliation or loss of market access. 

Practical checklist for policymakers (a short playbook)

• Define which industries and why (technology challenge, scale, spillovers).

• Set performance metrics (cost reductions, productivity, export share, R&D intensity) and a strict sunset (3–7 years, extendable only on clear evidence).

• Offer graduated, conditional support (tariffs + matching R&D grants + export incentives), not unconditional lifelong tariffs.

• Create an independent evaluation body to audit progress and publish results.

• Keep trade partners informed and seek carve-outs or temporary arrangements in regional agreements where possible.

• Combine with education, infrastructure, and competition policy so protection does not create permanent monopolies. 

Realistic expectations

Even when well designed, tariffs are only one piece of an industrial strategy. They can buy time and help create space to learn, but they do not automatically create globally competitive industries. Many successful modern industrializers combined a mix of: selective protection, state support for technology adoption, heavy investment in skills and infrastructure, and policies that pushed firms to export or otherwise face competition eventually.

Bottom line

Tariffs are a blunt tool: useful in carefully circumscribed, temporary, and well-governed cases where market failures block infant industries from developing. But used as a default policy, or without credible performance rules and complementary interventions, tariffs are much more likely to backfire — producing higher prices, stagnation, and political rents. History and recent research both warn: the how matters far more than the whether. 

If you want, I can:

• write a policy brief (2–3 pages) that applies this checklist to a specific country (pick one), or

• prepare short case studies comparing South Korea, Argentina, and India to show contrasts, or

• pull a readable list of the best academic/agency resources (WTO, UNCTAD, IMF, World Bank papers) so you can dig deeper.