Tariffs Failed in the Middle East—America Shouldn't Make the Same Mistake
Protectionism in Egypt and Iraq fueled corruption, stagnation, and smuggling—not prosperity.
When economic anxiety strikes, protectionist politicians reach for the same dusty playbook: Slap tariffs on imports, invoke the national interest, and promise that "local industries" will rise like a phoenix from the ashes of the markets the government just torched. The approach sounds pragmatic—even patriotic—but in practice, especially in the Middle East, it has been a spectacular failure. The United States should not follow the same dead-end road.
Take Egypt: In 2016, facing fiscal pressure and public dissatisfaction, the government raised tariffs on hundreds of imported goods—everything from electronics to household furniture. The stated goal was to protect domestic industries and reduce reliance on foreign goods. The outcome? Inflation soared, local industries remained stagnant, and Egyptian consumers were left paying more for lower-quality products. The government hoped tariffs would nurture innovation; instead, they strangled competition and punished ordinary people.
In Iraq, where the state has tried to rebuild its shattered economy after years of conflict, officials implemented tariffs to supposedly boost "national production" and replenish government coffers. But in a country where corruption runs deep and borders are porous, the policy only incentivized smuggling and rent seeking. Goods flowed illegally across borders while customs officials took their cut. Meanwhile, consumers bore the cost, and genuine economic growth never came. Tariffs there didn't protect industries—they protected the corrupt.
Contrast that with nations like the United Arab Emirates and Qatar, which have kept tariffs relatively low and instead focused on building knowledge economies. These countries understand a simple truth: You don't get prosperity by putting up walls. You get it by opening doors—to talent, capital, and innovation. Even Saudi Arabia's state-led Vision 2030, often maligned for its ambition, relies more on public-private partnerships and foreign investment than blanket protectionism.
In the U.S., tariffs have reentered mainstream political discourse under the banner of "America First." President Donald Trump's trade war has reignited a national debate about globalization and industrial decline. In March, the Trump administration imposed blanket tariffs on steel, aluminum, and washing machines—and in retaliation, foreign governments targeted U.S. farmers and exporters. In April, the president announced tariffs on virtually all imports from all countries, leading to a stock market crash and predictable chaos that only settled once Trump conceded to a 90-day pause on most of his new tariffs.
According to the Peterson Institute for International Economics, U.S. consumers will bear the brunt of tariff costs, paying billions more in hidden taxes. The Congressional Budget Office estimates that low-income Americans will suffer the most. Meanwhile, the idea that domestic manufacturers will magically modernize and reopen their doors is a fantasy of epic proportions. Between technological advancement and other factors, most Americans aren't chomping at the bit to stand in an assembly line all day.
Protectionists like to invoke the "golden age" of American manufacturing, but they ignore the fundamental economic reality: prosperity doesn't come from artificial insulation—it comes from competition, innovation, and the freedom to trade.
Consider the 1930 Smoot-Hawley Tariff Act—one of the most catastrophic policy missteps in American history. Enacted during the Great Depression, it raised duties on over 20,000 imported goods. Other nations soon retaliated, trade plummeted, and the global depression deepened. It's a cautionary tale of what happens when governments mistake economic nationalism for economic strategy.
Libertarians understand that tariffs are just taxes by another name—hidden levies that quietly erode consumer choice and reward political favoritism. They're the product of a central-planning mentality that treats citizens like chess pieces and markets like war zones. This mindset sacrifices individual liberty at the altar of economic nationalism.
Tariffs are not a long-term plan. They're a political gimmick, a Band-Aid on the deeper wounds of decaying infrastructure, outdated education systems, and burdensome regulations. The lesson from Baghdad to Buffalo is the same: If you don't fix the fundamentals, no amount of tariff tinkering will bring back prosperity.
Rather than doubling down on failed ideas, penalizing consumers, and propping up uncompetitive firms, let's invest in the things that make markets thrive—education, entrepreneurship, infrastructure, and innovation. Let global competition inspire us to be better, not to run away and hide in fear.
We've seen the wreckage of protectionism in the Middle East—we've seen it in our own history books. It's time we learned instead of repeating the mistakes of the past.
