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Trade wars are often said to be a risky business, but if the past few years have shown us anything, it’s that we’ve been sleepwalking through a system that’s been rigged for decades. President Donald Trump, who has made a point of his presidency to challenge globalist economic orthodoxies, has chosen tariffs to reignite debate over the structure of global commerce.
Since 1990, American trade policy has been shaped by diplomacy and compromise, but the era of polite negotiations appears to be over. On April 2, 2025, in what he denominated “Liberation Day,” President Trump announced a sweeping new tariff regime: a 10% blanket tariff on all imported goods and punitive levies on select countries, including China, where some items will be taxed at rates as high as 50%. The measures also include expedited timelines for implementation, enhanced Customs and Border Protection enforcement to prevent transshipment, and a redefinition of origin rules to close long-abused loopholes. The policy marks a deliberate turn away from decades of liberalized trade, placing strategic interest ahead of multilateral consensus.
The tariff package functions not as a single policy but as a signal that the United States will no longer tolerate systemic disadvantage in trade relations. Time and time again, successive American administrations signed multilateral trade deals that promised efficiency but delivered industrial erosion. The new tariffs, applied to over sixty nations, are designed to protect American industries from what the administration describes as chronic cheating. China remains central to this calculus, though the measures are global in scope. Steel, electronics, pharmaceuticals, and automotive components are all included. The policy is coupled with investment incentives for domestic manufacturers, a fast-track review for critical supply chains, and restrictions on firms that offshore production but continue to benefit from federal procurement contracts. This is an assertive, unapologetic policy grounded in a coherent strategy: restore bargaining power to the American state after years of diluted diplomacy disguised as trade policy.
Economic Critiques: A Chorus of Alarm
Orthodox economists have raised concerns. The Organization for Economic Cooperation and Development forecasts slower U.S. growth, estimating a 2.2% rate for 2025, and anticipates inflation reaching 2.8%. Corporations warn of cost pressures. Financial analysts speak of investor unease. Retailers fear thinner margins as sourcing costs rise. Agriculture groups voice anxiety about foreign retaliation targeting soybeans, corn, and meat exports. In the manufacturing sector, firms dependent on foreign inputs raise alarms over price volatility and inventory disruptions. According to mainstream economic theory, tariffs distort markets, limit consumer choice, and risk retaliation. These are textbook criticisms, grounded in a model that assumes mutual compliance, strong institutions, and rule-bound trade. However, that model no longer maps to present realities. The global trade system has been compromised by deliberate manipulations, especially by authoritarian states with mercantilist instincts.
President Trump’s Logic: Countering Systemic Manipulations
The administration’s rationale targets those distortions directly. President Trump’s concern lies not with international trade in itself but with the systemic manipulation that has come to define it. China, through deliberate devaluation of the yuan, has subsidized its own exports while shielding its domestic market from foreign competition. The People’s Bank of China has used capital controls and covert interventions in currency markets to keep the yuan undervalued, giving Chinese exporters an artificial edge. The same regime tolerates, and in some cases encourages, theft of intellectual property at a scale that renders commercial reciprocity untenable. U.S. and EU firms have faced cyber-intrusions, forced technology transfers, and discriminatory regulatory treatment in joint-ventures. Many Western companies, including European ones, have begun scaling back R&D operations in China for this very reason. Under such conditions, tariffs operate not as punitive tools but as corrective ones.
Non-Tariff Barriers: A Growing Problem
Beyond currency and IP, non-tariff barriers have proliferated. China applies opaque licensing regimes, preferential state procurement policies, and subsidy programs disguised as environmental initiatives. Other countries use regulatory barriers to restrict U.S. products. India’s agricultural import standards, Brazil’s pharmaceutical registration delays, and Japan’s auto certification procedures all serve to disadvantage foreign competition under the guise of compliance. The European Union, long an advocate of rules-based trade, operates behind a formidable wall of regulatory exclusions and managed preferences. The EU imposes complex conformity assessments and eco-design standards that often function as de facto tariffs. Fortress Europe champions free trade rhetorically while engineering trade flows to benefit its own industries. These asymmetries form the backdrop to Trump’s strategy.
Restoring Balance: Fair Trade Over Free Trade
This is not about bilateral trade balances. Structural imbalances have developed, and Trump’s tariffs are a mechanism to confront those imbalances. Unlike diplomatic efforts that yield little beyond platitudes, tariffs impose material consequences. They serve as instruments of pressure, designed to encourage behavioral change by making rule-breaking costly. This is not protectionism for its own sake, but a targeted application of leverage.
The standard consumer argument assumes that tariffs necessarily result in higher prices. This may be true in some cases, but it ignores the deeper costs of industrial decline. What are the consequences of reliance on foreign supply chains for critical goods such as pharmaceuticals or semiconductors? The pursuit of ever-cheaper goods has come at the cost of economic resilience. In this context, modest increases in consumer prices represent a rational investment in strategic autonomy.
President Trump’s Case: Prioritizing National Interests
The distinction between “free trade” and “fair trade” is substantive. Free trade theory presumes a baseline of equity among participants. Fair trade acknowledges the need for enforceable rules and equitable practices. Trump’s critics assume that America will benefit from leading by example. His administration rejects this assumption, treating trade as a site of competition rather than consensus. Tariffs, in this logic, are not deviations but necessary countermeasures.
The moral case follows from this strategic one. American workers have borne the costs of global integration without compensation. Industrial communities were dismantled, replaced not by revitalization but by low-wage service employment and dependency. Previous promises of retraining and adaptation have proven hollow. In contrast, the current policy framework privileges productive capacity and national interest over theoretical efficiency. It seeks to reverse decades of decline in the manufacturing base.
A Call for a Balanced Approach
This is not nostalgia. It reflects an understanding that economies require foundational strength—industries that build, innovate, and generate tangible value. The pursuit of lowest-cost production has undermined that strength. Trump’s policy reasserts the need for balance. It does not oppose globalization but insists on reciprocity and respect for sovereign agency.
Inefficiencies will exist. Trade-offs are inevitable. Not every sector will benefit. However, the greater risk lies in accepting continued erosion of strategic capabilities. Over time, such erosion weakens both economic independence and democratic legitimacy. Policy that ignores this does so at its peril.
Opponents frequently invoke Adam Smith yet overlook his caution against aligning national policy with the interests of transnational capital. Many multinationals now operate beyond national accountability. Tariffs reintroduce the idea that access to the American market comes with conditions and responsibilities.
The tariff policy thus represents a recalibration. It reminds trading partners and multinational firms alike that economic engagement with the United States entails obligations, not entitlements. The policy reaffirms the primacy of national interest in a global economy increasingly defined by asymmetry.
Trade Wars: Necessary and Strategic
Trade wars are difficult and imperfect. But when strategic objectives have been ignored for too long, confrontation becomes necessary. President Trump’s actions reflect a willingness to accept that burden.
Bepi Pezzulli is a Solicitor of the Senior Courts of England and Wales specializing in Governance as well as a Councillor of the Great British PAC. He tweets at @bepipezzulli
Image generated by AI.
Source: TLB
