https://www.city-journal.org/article/trump-tariffs-trade-consumption-production
Behind all the drama of President Donald Trump’s tariffs lies the hope that they serve some clear purpose for American and global trade. But Trump’s signature inscrutability makes it hard to discern what that purpose is—or whether one even exists.
Either way, his actions threaten to unravel the global trading system that has been in place for the past 80 years. That unraveling would bring economic and financial pain—but also potential upside, given that the current system is ultimately unsustainable.
The current system emerged from a set of relatively narrow foreign policy priorities in the years following World War II. Washington focused on rebuilding Europe and Japan after the war’s devastation. Part of that motivation was humanitarian—but more importantly, it was a strategic effort to use rising prosperity in those regions to counter the spread of Communism.
As part of this effort, the U.S. directed massive aid flows overseas, most famously through the Marshall Plan. To support industrial recovery abroad, Washington also allowed goods from Europe and Japan to enter the U.S. market with minimal restrictions, while permitting those nations to maintain tariffs and other protections for their fragile domestic industries. The dollar’s role as the world’s dominant trading currency—the so-called global reserve—further aided this arrangement by keeping the dollar strong. That, in turn, made foreign goods cheap for American consumers and U.S. exports more expensive abroad.