A report released on Tuesday warns against the rise of isolationist economic policies, outlined Karim El Aynaoui, Executive VP of Mohammed VI Polytechnic University and Dean of its Humanities, Economics, and Social Sciences Cluster, and Hinh T. Dinh, a former lead economist in the Office of the Senior VP and Chief Economist at the World Bank. The publication coincides with US President Donald Trump’s unwavering commitment to impose tariffs on Mexico and Canada.
Western leaders, including Trump, have pushed for higher tariffs on international trade, a move that risks escalating geopolitical tensions and hindering export-driven industrialization. Trump has vowed to raise tariffs on Mexico and Canada to 25% unless they curb illegal immigration, and he has warned that China could be next.
“The U.S.-China trade war exemplifies this trend, with average tariff rates rising sharply since 2018. Now that Donald Trump, the self-proclaimed ‘Tariff Man,’ is back in the White House, a reversal is unlikely,” the report stated.
This protectionist shift extends beyond the US. The European Union has also imposed tariffs on Chinese electric vehicles, limiting investment and slowing economic growth.
To counter these challenges, the report authors El Aynaoui and Dinh advocate for stronger macroeconomic resilience through sound fiscal policies, inflation targeting, and flexible exchange rates.
Additionally, as traditional export-led industrialization becomes less viable due to automation and shifting economic dynamics, the report urges governments to harness technology to boost productivity and innovation, particularly in key sectors such as healthcare, education, and agriculture.
The authors also underpinned the importance of international cooperation and increased investment in labor-intensive industries—including agribusiness, green manufacturing, and pharmaceuticals—to generate jobs and drive sustainable growth amid ongoing economic crises.
“None of this will be possible with the ‘every country for itself’ mentality that seems to be taking hold worldwide. While the Washington Consensus had a decidedly mixed track record, it emphasized international engagement and cooperation,” the report concluded.