Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal
The New York Times
Free trade has been so beneficial to so many countries that the world may find a way to live without its biggest player.
President Trump’s self-proclaimed “liberation day,” in which he announced across-the-board tariffs on the United States’ trading partners, carries an echo of another moment when an advanced Western economy threw up walls around itself.
Like Brexit, Britain’s fateful vote nearly nine years ago to leave the European Union, Mr. Trump’s tariffs struck a hammer blow at the established order. Pulling the United States out of the global economy is not unlike Britain’s withdrawing from a Europe-wide trading bloc, and in the view of Brexiteers, a comparable act of liberation.
The shock of Mr. Trump’s move is reverberating even more widely, given the larger size of the American economy and its place at the fulcrum of global commerce. Yet as with Brexit, its ultimate impact is unsettled: Mr. Trump could yet reverse himself, chastened by plummeting markets or mollified by one-off deals.
More important, economists say, the rise of free trade may be irreversible, its benefits so powerful that the rest of the world finds a way to keep the system going, even without its central player. For all of the setbacks to trade liberalization, and the grievances expressed in Mr. Trump’s actions, the barriers have kept falling.
The European Union, optimists point out, did not unravel after Britain’s departure. These days, the political talk in London is about ways in which Britain can draw closer to its European neighbors. Still, that sense of possibility has come only after years of turbulence. Economists expect similar chaos to buffet the global trading system as a result of Mr. Trump’s theatrical exit.
“It will not be the end of free trade, but it is certainly a retreat from unfettered free trade, which is the way the world seemed to be going,” said Eswar S. Prasad, a professor of trade policy at Cornell University. “Logically, this would be a time when the rest of the world bands together to promote free trade among themselves,” he said. “The reality is, it’s going to be every country for itself.”
