by John Michaelson at Wall Street Journal
The global trading regime must change. Tariffs, which are front and center on President Trump’s agenda, can help achieve this—if used properly.
Tariffs have been enlisted since the days of Hawley and Smoot back in 1930. America thrived with a high-tariff regime in the 19th and early 20th centuries. The tariffs of 1930 were high but not exceptional, and they didn’t cause the Great Depression.
President Biden deployed tariffs against American trading partners just as his predecessors, including Mr. Trump, did.
Opening American markets to the world made sense after World War II. Europe and Japan were smoldering ruins and needed access to American markets to rebuild. We had large trade surpluses. For a generation, this trading system worked. Foreign prosperity and American hegemony went hand in hand.
Things began to go off the rails in the 1970s, followed by the Japanese auto invasion and the rise of Chinese manufacturing. We now have large trade deficits. The flood of imports has cost millions of American jobs and devastated the industrial heartland.
The principles that guided America’s industrial rise remain relevant even in today’s global trade environment. That means providing businesses with enough certainty and protection to justify long-term investments in domestic production capacity and workforce training in the face of ruthless mercantilist competitors.
The alternatives are far worse. That is true of both the top-down…
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