In my experience there is a very fine line of tax rate that stimulates and impairs local manufacturing.
My home country kept every consumer product out of reach for the common man through law (70's~80's). This created an industry that, in certain segments such as automotive and computing, became complacent and aged for the most part (there were still a few brilliant entrepeneurs and technically skilled computer clone designers).
In the 90's it started opening the market (together with the PC market explosion), albeit with a hefty 60% tax on finished goods (this was designed to foster local manufacturing) but with much lower rates for primary goods (semiconductors included). This created two things: high prices and a grey market. The high prices maintained the complacency of the auto and consumer industries - everything that couldn't be moved easily then: white and brown goods and cars. On the other hand, what initially helped spike the tech companies given they were able to purchase more advanced equipment, in a few years the grey market expansion finished off these companies due to the excessive price erosion.
The issue does not extend to more niche segments due to regulation: a few areas have strong local design and manufacturing (e-scales, banking and commercial automation, instrumentation, etc.). Given the production volumes are lower, it is easier to enforce.
A similar attempt was made to block toys via compliance and regulation - unfortunately enforcement is weak and corrupt.