Lake and I survey the historical context for the Trump Administration’s trade strategy, examine the reasons for this dramatic turn in American trade policy, and summarize the likely domestic and international effects of the strategy. This takes into account the degree of organization of the interests, how much political power they have, and the deadweight costs of the policy; the result is a government that weighs the interests of protectionist industries against the interests of industries and individuals that consume imports (and tradables more generally) and aggregate social welfare. Just as the isolationist-internationalist divide roughly tracked the economic interests of major American regions and industries, there is a clear division between the generally internationalist coasts and big cities, on the one hand, and the nationalist populists in heartland industrial and agricultural regions.
Author: Menzie Chinn
Published at: 2026-01-21 23:13:31
Still want to read the full version? Full article
