US transnational firms began to shift manufacturing to lower-income countries in the second half of the 20th century under the banner of “free trade.” On the surface, knocking down obstacles to free trade seems a boon for all countries involved. Removing tariffs on goods allows more world commerce and, thus, an increase in wealth for all. However, questions soon arose as to who actually benefitted and what the true cost of free trade was.

The clamor for “free trade” hides the fact that, historically, countries have recognized the need for tariffs to protect domestic industries, at least when those industries are developing. In the US, “Congress pursued protectionist policies throughout the post-Civil War period” (253). Contemporarily, however, much rhetoric revolves around the benefits of free trade and pays little attention to how the United States and many other countries relied on protectionist tariffs to allow the home economy to grow and develop. Instead, “neoliberal” groups in the 1980s and 1990s ridiculed the “‘bad old days’ of the 1970s when Third World governments resorted to high tariffs to protect their own fledgling industries, a strategy called import substitution” (253). They touted the benefits of removing tariffs, saying that this would result in a benefit to all businesses, both in the US and in Latin American countries.