Trump’s trade policy is misguided but don’t be quick to blame tariffs

As the clock ticks down to Donald Trump’s planned imposition of “reciprocal tariffs” on US trade partners on April 2, Trump’s opponents have been attacking tariffs as a price-raising menace, rather than indicting Trump’s two-month master class on how to misuse a potentially effective policy tool.

Many Democrats seem to have forgotten that Joe Biden increased the size and scope of the first Trump administration’s tariffs on imports from China. And while Biden raised tariffs in 2024, inflation still started to decline.

Biden’s combination of tariffs and industrial policies to boost demand for domestic goods and incentivise investment delivered the manufacturing boom that Trump keeps promising. Instead of trumpeting this achievement, the Democrats’ 2024 presidential candidate Kamala Harris attacked Trump’s proposed tariffs in a campaign that lost a majority of working-class voters.

Now, instead of attacking Trump’s misguided notion that tariffs alone can revive American manufacturing, and highlighting his plan to kill the industrial policies that will deliver new manufacturing jobs, Democrats have doubled down.

Branding tariffs as Trumpian is a mistake. If you support a carbon border tax to combat climate change or enforcement of labour standards in trade pacts, you support tariffs. And tariffs are popular. Shortly before the US presidential election, 56 per cent of Americans favoured increasing tariffs.

The damage Trump has caused since taking office in January is not due to tariffs per se but the economic uncertainty caused by constant tariff changes and the targeting of non-trade-related goals, like migration, fentanyl trafficking and countries like Canada – with which the US has a non-oil trade surplus. Riding Trump’s tariff roller coaster, prospective US manufacturing investors are more likely to reach for a barf bag than their chequebooks.