Earlier this week, U.S. President-elect Donald Trump promised to impose 25 percent tariffs on all products imported into the country from Canada and Mexico unless both countries stopped illegal drugs and undocumented migrants from crossing into the U.S. over their shared borders. The threat was in line with one of the most eyebrow-raising policy ideas that Trump has floated for his second term: his proposal to put blanket tariffs on all imports into the United States.
The precise details of the plan have varied, with Trump at different times floating levies of 10 percent and 20 percent on imports from most countries, and 60 percent to 100 percent on those from China. But regardless of the precise level at which the duties are set, and even if it is never fully implemented, the plan represents a dramatic departure from longstanding U.S. trade policy.
For decades, U.S. international economic policy has been based on the assumption that the gradual liberalization of trade between nations would create win-win benefits for all sides. Multilateral trade deals like the North America Free Trade Agreement, or NAFTA, and the Trans-Pacific Partnership, or TPP, were designed to allow each participating nation to specialize in what it does best, lowering costs and increasing productivity for all. With the overall size of the global economic pie growing, everybody’s slice of it would likewise continue getting bigger—and nobody would need to squabble over the crumbs.