Tariffs in the United States date back to 1789, when Alexander Hamilton saw them as a solution to two crises facing the newborn republic: A desperate need to raise revenue and a desire to industrialize a nation that seemed dangerously dependent on England.
But in modern times, they have almost always been a negotiating tool — economic coercion in the service of diplomacy, a cudgel to force other nations to the table. What makes President Trump’s move on Saturday against Mexico, Canada and China different is that he seems uninterested in pursuing deals.
For now, at least, the tariffs, in his view, are the point, a means of bolstering the nation’s finances as he simultaneously seeks territorial expansion and strategic advantage over an increasingly assertive China.
He said as much in his Inaugural Address, only 12 frenetic days earlier. “Instead of taxing our citizens to enrich other countries,” he said, “we will tariff and tax foreign countries to enrich our citizens.”
He went on to describe his plan to establish an “External Revenue Service,” and a few days ago mused to reporters that income taxes might whither away, as tariffs become the main sustenance for America’s $6.8 trillion annual federal budget.
Mainstream economists are largely skeptical of Mr. Trump’s faith in tariffs as a game-changing tool for raising revenue or as an effective way of nurturing the return of domestic industries that have withered under global competition.
Indeed, Mr. Trump’s approach sounds like a Hamiltonian fantasy, wrapped in an aggressive vision of a world in which America controls Greenland, takes back the Panama Canal and makes the rest of the world pay up for access to the world’s largest economy. Yet, while it was easy to miss amid all the headlines this week of freezes on foreign assistance, purges at the F.B.I., the firing of inspectors general and efforts to induce the departures of federal workers, Mr. Trump kept returning, almost daily, to his belief in tariffs.
He has praised William McKinley, the tariff loving 25th president, who, for good measure, seized the Philippines, Guam and Puerto Rico in a show of imperialism that marked the United States’ emergence as a global power. Mr. Trump described the Gilded Age, from the 1870s to 1910 or so, as the golden era of American industrial might, “the richest our country ever was.”
When Mr. Trump talks about that era, he dwells on the country’s prodigious steel production, promising that tariffs will bring it back. In his description of this golden age, he brushes past the worst abuses of the era, like the 1892 Homestead steel strike, when Andrew Carnegie and his associate Henry Clay Frick engineered brutal attacks on striking workers. Nor does he talk about the acute racial and gender discrimination of the era, or the environmental degradation that, over the decades, led to regulation that he has vowed to roll back.
But in embracing tariffs, he is also completing a journey. No president since World War II has been more determined to scuttle the remnants of globalization for unvarnished economic nationalism. His move on Saturday even eviscerated the biggest trade deal he negotiated in his first term: the United States-Mexico-Canada Agreement, or USMCA, which replaced the North American Free Trade Agreement.
“The USMCA has to do with free trade and no tariffs,” President Claudia Sheinbaum of Mexico said on Friday. “If this scenario were to occur, it would obviously set aside the trade agreement,” she added with considerable understatement.
Mark Carney, a former central banker who is one of the contenders to replace Justin Trudeau as the leader of Canada’s Liberal Party — and the next prime minister if he wins — was more direct. He argued that Canada should demand repayment of “subsidies” it gave the United States by selling so much of its oil production to American customers at a discount.
Mr. Trump’s primary argument for imposing the broad tariffs was the cross-border traffic in fentanyl, whose precursors are largely produced in China, and which make it into the U.S. through drug cartels, among other routes.
Fentanyl is the leading cause of death for Americans aged 18 to 45, and during the Biden administration was a focus of extensive negotiations with China. It is one of the few areas in which American officials claimed they made progress with President Xi Jinping, and there were episodic examples of Chinese crackdowns.
What is curious about the tariffs, though, is that they were imposed before Mr. Trump met as president with the leaders of China, Canada and Mexico to discuss what more they could do.
It is still unclear whether Mr. Trump’s action will immediately escalate into an old-fashioned trade war, the kind that was supposed to be banished in a world of freer and freer trade. On the North American continent, that era was supposed to end with NAFTA, which went into effect 31 years ago and phased out tariffs on textiles, automobiles, agricultural products and other products.
From the start, NAFTA was the source of political division, and endless arguments over whether the harm to workers was worth the benefits, including standards for labor rights and environmental protection. In many ways, the resentments it engendered fueled Mr. Trump’s political rise.
With Mr. Trump’s signature on Saturday, that entire process of trade liberalization was wiped out. When Trump officials briefed reporters on Saturday, there was barely mention of NAFTA’s replacement, the USMCA. And a White House social media account tried to pre-empt any criticism, declaring that “the fake news is already lying about the impact of tariffs.”
Not surprisingly, many economists recoil when they hear Mr. Trump talking about tariffs as the solution to America’s trade and industrial challenges, or as a way to punish other nations for the flow of fentanyl into the United States. They contend that he has misread history and ignored the fact that tariff-protected American industries often got lazy, and were later eviscerated by up-and-coming competitors.
The vocal critics have included Lawrence H. Summers, the Treasury secretary in the Clinton administration and a leading White House adviser in the Obama administration, and Phil Gramm, the former Republican senator from Texas, who was chairman of the Senate Banking Committee.
“Our united opposition to nondefense-related tariffs is based not on our faith in free trade but on evidence that tariffs are harmful to the economy,” they wrote in The Wall Street Journal. “Protective tariffs distort domestic production by inducing domestic producers to commit labor and capital to produce goods and services that could have been acquired more cheaply on the international market.
“In the process, productivity, wages and economic growth fall while prices rise. Tariffs and the retaliation they bring also poison our economic and security alliances.”
Mr. Trump seems undisturbed by this critique. He has convinced himself, his aides say, that whatever retaliatory steps Canada, Mexico and China take, they will ultimately be harmed more than American consumer will.
In his Inaugural Address, Mr. Trump had a prediction: “Massive amounts of money pouring into our Treasury, coming from foreign sources. The American dream will soon be back and thriving like never before.”
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