Oct. 30, 2024, 5:30 p.m.
Donald Trump had been president for only 15 months when he first flexed what became his economic superpower. In March 2018, he imposed his first round of tariffs against Chinese imports. Six months later, he announced even more tariffs targeting China. By December, exhilarated at finding a tool he could wield unilaterally without Congress, he was hooked, proclaiming himself “Tariff Man.”
For a candidate who barely mentioned tariffs until three weeks before the 2016 election, from a party that had not included them in a platform written by his campaign, it is a stunning development. Republicans, in fact, had spent almost 100 years trying to live down their championing of sometimes-disastrous tariffs in the 19th and early 20th centuries.
Now, hoping to return to the White House four years after being ousted, Trump is fully committed to turning the clock back to the 1890s, a Gilded Age he romanticizes as even more glorious because of high protective tariffs. This time, there is no reticence to talk about what he wants to do to foreign competitors. He has forced a 19th century debate into a 21st century campaign.
“The Tariff Man is back,” said William Reinsch, longtime president of the National Foreign Trade Council and now Scholl Chair in International Business at the Center for Strategic and International Studies.
During a 67-minute session at the Economic Club of Chicago on Oct. 16, Trump mentioned tariffs 55 times. “It’s my favorite word,” he said. “It needs a public relations firm to help it. But, to me, it’s the most beautiful word in the dictionary.” He then proceeded to tangle over that word with Bloomberg editor John Micklethwait, the session moderator who repeatedly pressed him on his claims.
Those claims included his insistence that tariffs will bring in “hundreds of billions of dollars just from China alone” and will force “thousands of companies” to move their operations to the United States. He said he will put “100 percent, 200 percent, 2,000 percent tariffs” on foreign-built cars. “I’m going to put the highest tariff in history, meaning I’m going to stop them from ever selling a car in the United States.”
When Micklethwait noted that 40 million U.S. jobs depend on trade and warned of “the biggest trade war since Smoot-Hawley,” Trump said foreign competitors can avoid such consequences simply by building plants in the United States. And when Micklethwait said American consumers will end up paying “like a national sales tax,” Trump brushed that aside, saying, “No. The countries will pay.”
It is the same argument he has made since imposing his first tariff in 2018—and the same rebuttal economists have offered. “He is just wrong,” said Reinsch. “He ignores the inflationary effect; it raises prices.” He added, “He doesn’t take into account retaliation, the fact that the other guys will do to us whatever we’re doing to them.”
Among the mistakes Trump is making, Reinsch said, is his belief that tariffs will bring in so much revenue that even the income tax might be eliminated. “Trump’s tariffs will bring in something like $322 billion and the federal budget is in the trillions. This will not balance anything.”
Reinsch added, “He also ignores the fact that if you set the tariffs as high as he wants, like 60 percent for China, that’s just going to stop trade. And if you stop trade, nobody will be paying the tariffs and there won’t be any revenue.”
Kara Reynolds, professor and chair of the economics department at American University, said Trump’s first-term tariffs were estimated to cost the average family between $200 and $300. “This would be much more dramatic,” she said. “And you would expect to see a much larger number now.”
She said new tariffs would bring swift “retaliation from all of our trading partners.” She noted what happened in his first term. “Trump imposed steel and aluminum tariffs on all our trading partners, and they immediately put retaliatory tariffs across products. And the farm products were very hard-hit with retaliation as well,” Reynolds said.
Reinsch said American farmers continue to suffer from those tariffs. “There was retaliation and there was a lot of damage done to our economy, mostly to the farmers,” he said. “They lost the China soybean market to Brazil and they haven’t got it back.”
Before the tariffs, he said, “agriculture was always a bright spot in our trade landscape. We always had a surplus. Now, for the first time in like 40 years, we don’t.”
With U.S. exports of agriculture and food products declining by $27 billion just from the middle of 2018 to the end of 2019, Trump had to ratchet up agricultural subsidies. Payments to farmers went from just over $4 billion in 2017 to more than $20 billion in 2020, according to the Environmental Working Group.
“The farmers took the money,” said Reinsch. “But they would have preferred to sell the product.”
William McKinley (AP Photo)
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In pushing back against the consensus warnings of economists about high tariffs, Trump often cites the 1890s, contending at a September town hall in Michigan that “our country was probably the wealthiest it ever was because it was a system of tariffs.” He praised President William McKinley, who authored the tariff of 1890 as a member of the House. Trump did not mention that McKinley’s tariff triggered the Panic of 1893, the worst depression before the Great Depression, and caused Republicans to lose both chambers of Congress.
Nor did he mention that McKinley, before his death, changed his view. In McKinley’s last speech, delivered the day before he was fatally wounded by an assassin in Buffalo in 1901, he signaled that even he realized the time of tariffs was passing, warning against “fancied security that we can forever sell everything and buy little or nothing” and declaring that “the period of exclusiveness is past.”
In some ways, Trump’s worship at the altar of protectionism brings the Republican Party back almost a century. For 60 years, between 1884 and 1944, the GOP was the tariff party and used its platform to push tariffs. It started small in the 1884 platform, stating that “sheep husbandry” needed protection. By 1892, Republicans said, “We reaffirm the American doctrine of protection.” In 1904, they stated, “Protection, which guards and develops our industries, is a cardinal policy of the Republican Party.” It remained so even after President Herbert Hoover signed the disastrous Smoot-Hawley Tariff in 1930, deepening the Depression. But the word “tariff” disappeared from the party platforms after World War II, except for criticism like the 1988 platform that called tariffs “antiquated.”
That view prevailed until this year, when the GOP touted Trump’s tariffs. The declaration of the 1992 platform—“We are tough free traders”—no longer is operative.
