If we had tariffs, cars made in Japan and Germany would have to pay taxes to the U.S. to sell them here. The tariffs would be added on to the price of their cars. Since American cars would not have tariffs when sold here, we could sell them cheaper than foreign car makers could.
The problem would start, when those other countries retaliated. Either by placing tariffs on American made products sold in their country, or by embargo. Which would prohibit American products from being sold there at all.
In addition, by reducing the number of products foreign nations sell here, to protect American businesses, it would cause those other countries not to have enough money to buy American products.
Tariffs placed on European nations in the 20's-30's, left Europe with little money to buy American agriculture products, which made up a large portion of the American GNP (Gross National Product=total dollar value of all goods and services produced in a nation) which ultimately lead to a deflationary spiral and caused the great depression
When America crops couldn't be old overseas, it lead to an over supply, which lead to a price reduction. Lower prices seem like a good deal. But when deflation sets in, people stop buying and investing, waiting for prices to drop even farther. Spending, stops, investment ceases, people begin hoarding cash, credit dries up, banks fail, and an economic depression results.
American isolationism also lead to an American embargo of Japan. America made it illegal for American companies to sell anything to Japan. Japan has little natural resources, depended at the time on rubber, oil, steel, and other commodities to produce goods to sell.
That ultimately lead to a trade war between America and Japan, and triggered Japan's attack on Pearl Harbor.How might isolation affect the way a country develops economically?
If they do not have the resources to expand their economy, they will not develop.
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