The Economist: Trump's tariff plans risk repeating past economic mistakes

A recent opinion piece by The Economist provides a critical analysis of Donald Trump's approach to tariffs, suggesting that his protectionist policies risk repeating past economic mistakes. Drawing from historical lessons, the article emphasizes the dangers of high tariffs, a key issue that Franklin Delano Roosevelt identified as a cause of the Great Depression. Roosevelt warned that tariffs led to retaliation and hindered investment, a lesson that took decades to reverse through global cooperation. In 2025, the piece argues, Trump’s tariff-heavy agenda is a threat to the progress made since then.

Trump’s renewed focus on tariffs is portrayed as misguided, based on the belief that they could shrink America’s trade deficit, revive manufacturing, and boost government revenue. However, the article contends that these objectives are unlikely to be achieved. It highlights that tariffs often strengthen the US dollar, which in turn diminishes global demand for American exports, undermining the trade deficit reduction goal. The piece also points out that high investment, essential for technological advancements such as artificial intelligence, would be jeopardized by a focus on the trade balance. Therefore, the article stresses that Trump's protectionist policies fail to address the deeper economic needs of the US, especially as evidenced by the stagnant growth in other nations with large trade surpluses like Germany and China.

Further, the opinion piece critiques the impact of tariffs on American manufacturing. While certain sectors, such as steel and aluminum, saw revenue growth, this was at the expense of downstream industries, which faced higher input costs. The result was a net negative impact on the economy, as tariffs protected struggling industries at the cost of the more competitive ones. The article argues that this approach does not promote a sustainable manufacturing renaissance but rather distorts market dynamics.

Trump’s idea of replacing income tax with tariffs is also dissected, with the piece pointing out that tariffs primarily burden American consumers through higher import prices. Moreover, even if tariffs raised government revenue, they would be insufficient to cover the federal budget. The article concludes that Trump’s tariff strategies, even if used for negotiating leverage, would likely entangle the US in complex and damaging trade wars.

Lastly, the opinion piece critiques Trump's romanticization of the late 19th century's high-tariff period, pointing out that the real drivers of America’s growth during that time were population growth, the rule of law, and the success of non-traded goods. By disregarding these factors, Trump risks leading the US and the world down a dead-end path, repeating the economic mistakes of the past.

In conclusion, the article from The Economist presents a thorough and critical assessment of Trump's protectionist stance, arguing that it is based on flawed economic logic and could hinder America's long-term growth.

By Vugar Khalilov