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America let Germany keep high tariffs
The Postwar Offer
European countries were so poor and devastated from the war that reviving their economies became necessary for American security. Otherwise they might have gone communist. So the offer was that Germany could have really high tariffs on American goods, and America wouldn't reciprocate.
How It Lasted
A lot of that arrangement got institutionalized. There are many cases now of non-reciprocal tariffs, with American barriers lower than the other side's.
After the Cold War
After the Cold War the country grew doctrinaire in the belief that a simple free trade system would work, and it did not look for systematic cheating from China. Supply chain security now means economic policy can't be lifted straight out of a free trade textbook, and trade still has to benefit both ends.
How did the Marshall Plan help Europe recover?
The Marshall Plan ran from 1948 to 1951 and sent about thirteen billion dollars in aid to Western Europe, according to the US State Department's Office of the Historian. The money paid for food, fuel, machinery, and raw materials that European countries could not afford to import. Sixteen countries took part. Western European industrial output was well above its prewar level by 1951.
Why did Washington fear communist gains in Europe?
France and Italy had large communist parties after the war, and both did well in early postwar elections. In February 1948 communists took control of the government of Czechoslovakia in a coup. American officials feared that hunger and unemployment would push more countries the same way. The Italian election of April 1948 saw heavy American diplomatic pressure against the communist side.
How did GATT lower tariffs?
The General Agreement on Tariffs and Trade was signed in 1947 by 23 countries. Members negotiated tariff cuts in repeated rounds, and each cut was extended to every other member under the most-favored-nation rule. Eight rounds of talks over nearly five decades brought average tariffs on manufactured goods down sharply. The World Trade Organization replaced GATT in 1995.
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