Trump’s Tariffs Are Unique in History

U.S. trade policy went through three eras, focused on ‘revenue, restriction and reciprocity,’ economist Douglas Irwin says. The 47th president likes all three Rs, and a fourth, ‘retribution.’

Douglas Irwin has written several books on international trade. See, for example, my post Before You Criticize Free Trade, You Should Read Douglas Irwin's Book Free Trade Under Fire (2012).

By Tunku Varadarajan. Excerpts:

"“To whipsaw the markets like this amounts to grossly irresponsible economic management.” On April 4 Mr. Trump asserted on social media that “MY POLICIES WILL NEVER CHANGE.” “And yet, after pausing the tariffs, he said, ‘You have to be flexible,’ ” Mr. Irwin notes." 

"He calls Mr. Trump’s actions “cavalier” and says there is “no strategy. And this uncertainty is a tax on the economy, undermining consumer confidence and freezing up investment spending.”"

"In the first era, up to the Civil War, there was no income tax and “revenue was the key objective of trade policy.” In the second, which spanned the Civil War to the Great Depression, the main goal was “the restriction of imports to protect domestic producers.” The third era has focused on reciprocal agreements to reduce trade barriers, such as the North American Free Trade Agreement and the World Trade Organization."

"the interesting thing about Trump is that he likes all three of the Rs.”"

"This helps make sense of the contradictions in Mr. Trump’s trade rhetoric. He embraces revenue, restriction and reciprocity, but “it’s not clear which one’s the priority, because there are conflicts across them. If you’re going to bargain the tariffs away in reciprocity, that’s not a stable source of revenue. If you’re using tariffs to restrict imports into the U.S. in order to reindustrialize, well, then you can’t bargain them away either, because if you put the tariffs up and then put them down, businesses aren’t going to make decisions based on these quick tariff changes.”"

"In July 2020 the U.S.-Mexico-Canada Agreement supplanted Nafta. “The USMCA is Trump’s agreement,” Mr. Irwin says. “He negotiated and signed that in his first term. What’s the value of that trade agreement if he can come up with some new rationale to impose tariffs that’s outside the bounds of what was negotiated?”"

" “we’re changing direction in a major, historically unprecedented way on the whims of one person. Because Congress has not signed off on this. There’s no political and societal consensus.”"

"As chairman of the House Ways and Means Committee, McKinley sponsored the Tariff Act of 1890, which raised import duties to nearly 50% to protect American industry. But as president, McKinley changed his mind on tariffs."

"there was another one [a period of industrial expansion] between 1830 and 1860, before the Civil War. And during that period tariffs were going down." 

"There were so many other factors going on that were making the U.S. economy wealthy”—among them technological change, mass immigration and capital inflows from Europe. “We were open to ideas, capital and people from the rest of the world.”"

"the reality that other countries are taking advantage of us is very elusive."

Related posts:

Can Trump’s Tariff Offensive Deliver New American Jobs? (2025)

Americans Are Stockpiling Ahead of Trump’s Tariffs (2025)

Powell Warns of ‘Challenging Scenario’ for Fed as Trade War Rages (2025) 

How Much Do Tariffs Raise Prices? (2025)

Politicians talk about creating manufacturing jobs but do people really want them? (2025)

How some of Trump's policies might affect the economy (2024)

Tariffs are regressive: they fall more heavily on lower-income families who tend to spend more of their income on cheap imported goods (2024)

Americans Are Stockpiling to Get Ahead of Tariffs: Some consumers are snapping up computer parts, vacuum cleaners, coffee and olive oil before levies take effect (2024)

Life is full of tradeoffs: If we support American workers with trade restrictions it might mean more inflation (2023) 

Will removing Chinese tariffs have a dramatic impact on inflation? (2022)

Life Is Full Of Tradeoffs: If We Want To Do More To Fight Climate Change We May Have To Lower Tariffs On Solar Panels Which Might Put U.S. Firms Out Of Business  (2021)

Mark Twain, Free Trade and Tariffs (2019)

What happened in some earlier U.S. trade Wars? (2019)

The importance of imports of capital and intermediate goods to the U.S. economy (2019)

Historical trends in manufacturing (2018)

Abandoning free trade might threaten peace and stability across the globe (2017)

Interesting New Book On Trade And Tariffs By Marc-William Palen (2017)

Before You Criticize Free Trade, You Should Read Douglas Irwin's Book Free Trade Under Fire (2012)