After the end of World War II, there was a general consensus that tariffs had exacerbated the impacts of the Great Depression. As a result, the nations of the free world created institutions that were biased in favor of free trade. Tariffs, in that regime, were only a legitimate tool to force other countries to open their markets. They could not be pursued as an end in and of themselves.
The new system worked. Free trade created new efficiencies that brought billions of people out of poverty and kept the cost of goods low. Inflation disappeared as a problem for a generation. But while the benefits of globalization as a whole far exceeded the costs, they were not distributed equally. Right-wing parties, at the behest of wealthy businessmen, prevented governments from creating adequate welfare states, and workers in America and Europe saw their wages stagnate.
The 2024 election will feature two different views of tariffs that are based on the new global realities. Biden’s approach is “friend-shoring.” He wants to use tariffs in a limited way–to prevent America from becoming dangerously dependent on China for goods that have a clear nexus to national security. Trump’s vision, on the other hand, is America as it existed in 1950, minus the extremely heavy taxes on the wealthy. He wants to use tariffs to make America totally economically self-sufficient, regardless of the cost that would impose on American consumers. It is the kind of import substitution scheme that one commonly finds in countries that are run either by populists or dictators. Or both.