ABSTRACT
Worldwide, average taris on imports of manufactured goods are today one-tenth what they were right after World War II. In the United States, average tari levels on imports of manufactures have fallen to just 2.5 percent from their peak of over 50 percent in 1930. Most foreign goods now enter the countries with the highest incomes without paying any tari. The lowering of trade barriers over the past 60 years does not represent an irreversible trend, however. Just 80 years ago, the world sharply increased taris and other trade barriers after a century of reductions in protectionism. In fact, when we compare today’s taris to those of the mid-nineteenth century, we conclude that trade barriers have not been reduced much at all over the past 150 years, and current taris seem low only compared to the post-World War I period’s sharp shift to protectionism. In short, trade policy, which is the sum of government laws, regulations, and taxes directed at international trade, may be better depicted by an up-and-down wave pattern than a continually declining curve.
