I Also Thought Tariffs Were a Good Idea – When I was 12

By Edward A. Sanchez - March 10, 2025

President Donald Trump has said tariffs are a “beautiful word,” and appears to be going through with his promise of imposing 25% tariffs on two of the U.S.’s largest trading partners and neighbors: Canada and Mexico. Additionally, he seems determined to go through with imposing reciprocal tariffs on everyone else, completing his vision of “Fortress America” (my term). I remember a time in my life when I thought tariffs were a good idea. That was more than 30 years ago, and I was in grade school.

I want to preface this post with the caveat that I’m not an economist, and my observations and opinions are from a 30,000-foot perspective. Total economic self-sufficiency has largely become the realm of closed, totalitarian regimes, whether on the far-right or far-left. I could go down my philosophical rabbit-hole of my circular theory of political dogma (essentially, the far left (Communism) and far right (Authoritarianism) are actually not that far apart in reality. But I digress.

In theory, total economic self-sufficiency is appealing. You’re not subject to the whims of foreign governments, companies, or raw materials disruptions. The value-added transactions at each step are collected for the benefit of domestic interests. You create domestic jobs. Seems like a win all-around.

For much of the 19th and the early part of the 20th century, the U.S. was basically economically self-reliant, and had tariffs on many imported goods and raw materials. This protected American jobs, and prior to 1913, provided plenty of revenue without the need for personal income taxes.

I could probably write a 10-page paper on all the nuances and developments in global trade in the 20th and 21st centuries, but I’ll try to cut to the TL;DR version. Long story short, since the post WWII period, the U.S. and most of the rest of the world has pursued a neoliberal trade policy of free trade and low tariffs. With this, many American companies looked to China for manufacturing starting in the 1980s, with this trend accelerating in the 1990s and early 2000s.

Over the last 30 years, China has gone from a backwards backwater to the world’s manufacturing powerhouse. China also smartly moved away from being totally reliant on manufacturing and started pursuing an aggressive policy of research and development of technology, specifically in the automotive sector. With EVs in particular, China has an outsized role, supplying the majority of battery packs and pioneering battery technology. Like it or not, the global automotive industry has become very reliant on Chinese suppliers and technology.

I understand the hypothetical appeal of tariffs jump-starting the U.S. domestic manufacturing sector and reducing our reliance on imports. The thing is, just as offshoring took decades, onshoring will also take decades. In the meantime, it will result in higher prices all-around, likely some plant closures and layoffs (due to their reliance on imported raw materials or components), and retaliatory tariffs from other countries that will affect U.S. exports.

The only area where the U.S. can be competitive in manufacturing is in high-tech or specialized goods, where the relatively high labor costs of the U.S. (compared to China and other lower-cost manufacturers) can be absorbed, and the buyers aren’t dissuaded by high prices. But even here, the growing sophistication of products coming out of China, Taiwan, Vietnam, and other emerging markets sometimes offer compelling alternatives for a significantly lower cost.

A more self-reliant U.S. economy may ultimately be a net positive, but that new economic model won’t magically manifest itself overnight. Much like the trading model built around NAFTA took decades to fully take shape, a model built largely around domestic self-reliance will take decades, and in the meantime, will result in a lot of disruption, rebuilding, retraining, and automation to make it competitive. And there’s no guarantee that the next administration won’t undo all of Trump’s tariffs.

I’m all for the U.S. becoming more competitive as an exporter and manufacturer, but I’m not sure actively antagonizing our allies and pursuing a belligerent, demanding foreign and trade policy is the way to do it.

(Image by David Peterson)