I am hardly an expert in global trade and tariffs, but I think we can all agree that coming out of the tariff fiasco it will be very different than what we have been used to for about 25 years.
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What’s more, Ip writes that both parties have shifted away from free trade.
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And so I enjoyed a column last week in the Wall Street Journal last Greg Ip, the paper’s chief economics commentator, titled “Global Trade Will Never Be the Same.”
Ip says US trade policy will “be more orderly and less chaotic, less driven by impulse and vendetta, more discriminating between allies and adversaries.’
But it won’t be what prevailed before 2025, much less 2017, at the start of Trump’s first term, Ip says.
“The pursuit of liberalized trade and high-minded principles that once drove US trade policy is gone,” Ip believes, adding that “In its place is an unsteady equilibrium of tariffs and transactional deals. American trade has moved in a more durably protectionist direction.”
The Trump administration went on its tariff binge by claiming authority under the International Emergency Economic Powers Act to raise tariffs by any amount for any reason on any country indefinitely so long as he declares an emergency. In his first term, his trade team had rejected that path as too risky legally and politically.
Last week of course the Supreme Court ruled the president did not have the authority to impose the tariffs, adding to the chaos.
Ip writes that in its ruling, the Supreme Court said IEEPA didn’t give him any authority to impose tariffs, much less without limit. “When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits,” it said.
 Ip adds that the ruling will likely reinforce the message of Trump’s many domestic opponents to the world that a friendlier America isn’t far away. “Donald Trump is temporary. He’ll be gone in three years,” Gavin Newsom, California governor and likely candidate for the Democratic presidential nomination, said at the Munich Security Conference a little over a week ago.
However, while tariffs’ central place in Trump’s economic philosophy is unique to him, says Josh Lipsky of the Atlantic Council. Nonetheless, “Higher tariff rates from the US are here to stay.”
Ip notes that “No president will lightly give up the hundreds of billions of dollars tariffs now generate in annual revenue. Tariffs will almost certainly lead to some jobs and factories over the next three years. That creates a constituency to defend tariffs, especially in key sectors like steel and cars and swing states like Michigan and Pennsylvania.”
What’s more, Ip writes that both parties have shifted away from free trade.
“When I ask some establishment Republicans about their future trade policy, they say it won’t have Trump’s impulsiveness, derisive tone or tendency to lump together adversaries and allies. But it will retain the emphasis on reciprocity—that is, punishing countries that mistreat the U.S. with their own tariffs, taxes and regulations. The government will still intervene to support sectors like semiconductors vital to national security.”
So will all that lead again to strong growth in global trade, as was the case for more than two decades before a major slowdown in recent years? Will continued tariffs actually increase US manufacturing and jobs? Will both Republican and Democrats both support protectionist trade policies?
I thought about asking an AI app for its crystal ball on the direction of global trade, but just couldn’t get myself to do it.
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