Trump’s tariffs and the illusion of de-globalization

Many analysts have interpreted Trump’s protectionist stance, and the United States’ imposition of tariffs, as economically irrational.

If the liberal motto was once that “under free trade everybody wins”, it is now logical to think that, under protectionism, everyone will lose. It would also mean the end of globalization, which would come at a great economic cost for the US.

In just the last few days, the US-Canada tariff crisis has escalated significantly. The Ontario government responded to Trump’s threats with a 25% tariff on electricity serving the states of Minnesota, New York and Michigan, prompting Trump to announce that he would raise tariffs on Canadian steel and aluminium to 50%.

Shortly after, Ontario authorities suspended the electricity rate hike, and Trump has now also walked back his retaliatory tariff hike.

Similar events are taking place on the other side of the Atlantic as well, as the European Commission has responded to US tariff threats on steel exports with its own package of measures targeting a range of American goods.

Trump’s narrative pivot has caused turmoil, and seems to run contrary to US business interests. However, a critical look at the benefits of free trade – and the US’ unique position in relation to it – can help us understand the resurgence of protectionist discourse, and the US’ trade war with China.

Free trade serves US interests

Economic history shows that, once the US’ technological development outstripped its competitors, it was able to turn free trade into an instrument that protected its own interests. At this point it, along with its allies, began to promote free trade as vital to the development of less advanced economies.

This resulted in globalization, which was what made