“I believe in the protective tariff policy and know we will be calling for its saving Americanism again,” stated President Warren G. Harding. Over a hundred years later, President Donald Trump is implementing a protective tariff policy to restore the American economy. President Trump is advocating for even more aggressive tariff policy in his second administration. The objective of this policy is to restore manufacturing, rebuild the middle class, and protect sovereignty. In the process, President Trump is also using tariffs as part of a diplomatic strategy in order to strike better trade deals. This is already starting to bear fruit with numerous countries seeking to renegotiate.
The policy of protectionism is hardly unorthodox. For most of the nation’s history, tariffs were utilized as the main source of revenue to finance the federal government and to protect the economy. It is often forgotten, but the policy of protectionism was the pillar of Republican economic policy from Presidents Abraham Lincoln through Herbert Hoover and was featured prominently in party platforms.
Protectionism does not mean a rejection of trade, but rather a realistic approach that places the American economy and worker first before foreign competitors. This was a precedent established by President George Washington and Secretray of the Treasury Alexander Hamilton. Both believed that the United States needed to be not only politically and economically independent, and not dependent upon foreign nations for necessities.
The economic policy of protectionism is a conservative policy. Conservatives such as Hamilton, Henry Clay, and numerous Republicans all supported protectionism. Both classical liberals and progressives promoted the doctrine of free trade. It was Progressives such as William Jennings Bryan and Presidents Woodrow Wilson and Franklin D. Roosevelt that started advocating that the nation abandon the protective policy and embrace free trade. It was conservatives that defended the tariff as a policy to protect American sovereignty, manufacturing, agriculture and workers.
Unfortunately, for decades the United States has pursued a policy that is misleadingly described as “free trade.” Trade agreements such as NAFTA, WTO (World Trade Organization), and granting Most Favored Nation (MFN) status to China were just some of the disasters, which led to our current predicament. While these agreements may have benefited corporations and flooded our markets with cheap consumer goods, it has had devastating consequences.
These agreements made it easier for corporations to outsource jobs to foreign markets, such as China and Mexico. Most recently, John Deere has signaled that it plans to open a new plant in Mexico, which will lead to the outsourcing of Iowa jobs. Deere is also a recipient of Iowa taxpayer-funded tax credits.
The nation has lost 5 million manufacturing jobs and 90,000 factories since 1994. Since 2001, the United States has lost an estimated 4 million jobs to China. Iowa has lost close to 34,000 jobs to China. Many family farms and ranches in Iowa have also not shared in the so-called benefits of free trade agreements.
Along with these losses, the nation is amassing massive trade deficits. This has devastated many communities, the middle class, and has a resulting impact on families. In 2024, the trade deficit was $1.2 trillion, and this included a $39 billion deficit in agricultural commodities. The United States is now importing more food than ever before. “That the trading system has failed America seems clear. In the last 20 years, we have transferred some $20 trillion of our wealth to the governments and citizens of the exploiting countries,” argues Ambassador Robert Lighthizer, who served as United States Trade Ambassador in the first Trump administration.
The United States currently operates on a free economy with low tariffs, but other nations, including those who are our allies, often use tariffs, value-added taxes, currency manipulation, industrial policies, among others that work against American manufactured goods and agricultural commodities. President Trump is absolutely correct when he states that for too long, nations have taken advantage of the United States, while in many cases we often subsidize their military defense.
Further, the loss of manufacturing has made the United States dangerously dependent on foreign nations, including hostile nations such as China, for necessities. Whether it is pharmaceuticals, semiconductors, shipbuilding, or other high technology products, the nation is dependent upon foreign nations and supply chains. The COVID pandemic exposed our dangerous overreliance upon foreign nations for necessities.
The United States was once the “Arsenal of Democracy” and now our manufacturing base has been hollowed out. Ship building is one example. Last year, the United States only produced three ships, while China is dominating and far outpacing in this industry. Free trade is resulting in not only a loss of manufacturing, but it has led to the direct subsidizing of the buildup of the Chinese military.
The policy of protectionism is about economic patriotism, placing America First, protecting national sovereignty, and ensuring a vibrant middle class. President Trump’s America First trade policy is working to fulfill these objectives.
