Not long ago, American diplomats traveled the globe promoting open markets, lowering barriers, and embracing free trade. That approach opened doors for U.S. multinationals and helped lay the groundwork for globalization at the end of the 20th century and into the early 2000s. Two decades later, many observers argue that model is evolving. In spring remarks, National Security Advisor Jake Sullivan described protecting strategic industries as a new policy aim that could replace free trade, calling it the new consensus in Washington. The shift is being discussed by policymakers, economists, and business leaders who worry about the consequences for prices and supply chains — citation: White House briefings, 2024.
The pendulum began to swing after Donald Trump imposed several rounds of sector specific tariffs, sparking trade frictions with Europe and China. Biden kept many of the protectionist measures and added new ones targeting semiconductors and electric vehicles from China. Historians and economists warn that the trend could push policy toward levels not seen since the early 20th century, when aggressive protectionism contributed to the Great Depression. The rise of these ideas has sparked debates about risks to growth and employment — citation: Irwin, Peterson Institute, 2024.
Many observers warn that a Trump victory could accelerate these pressures, reshaping the global supply chain and testing allies. The core question is whether tariffs protect domestic industries without triggering harmful retaliation or spillovers that ripple through the economy. The uncertainty has prompted policymakers and researchers to model contingency plans for a more protectionist era — citation: Douglas Irwin, Peterson Institute, 2024.
Trump’s Tariff Plans
The New Yorker would make tariffs the pillar of economic policy with an automatic tariff of 10% to 20% on all imported goods, including from allied countries. In the case of China, the rate could rise to 60%, and for cars of any origin it could reach 100%. These proposals have set off alarms among economists and trade partners who fear disruptive consequences for prices and competitiveness — citation: Trump campaign policy briefs, 2024.
Such plans have economists worried and have forced many nations to prepare contingency strategies in case a new round of trade frictions intensifies. The consensus among analysts is that the world economy is deeply interwoven, and decoupling would be highly disruptive for the United States — citation: Douglas Irwin, 2024.
Tariffs are effectively a tax on imports that, in the long run, tends to be passed on to consumers and businesses through higher prices for inputs. They can invite retaliatory measures and disrupt established supply chains. While there is some argument that certain domestic industries might gain, most economists see greater costs than benefits, including weaker export growth and higher production costs for import-dependent industries. In policy circles, concerns about the broader economic fallout are common — citation: Kara Reynolds, American University, 2019.
Fear of a Recession
Some observers anticipate a recession if Trump implements his tariff agenda after the elections. Studies from respected think tanks suggest family budgets could rise by a few thousand dollars annually in the absence of offsetting gains in efficiency. Critics contend these predictions reflect Wall Street-centric views, while supporters argue protectionism is essential to safeguard strategic industries. Historical episodes show that while tariffs can shield some sectors, overall economic activity can suffer, particularly in export-oriented communities and farming sectors — citation: Peterson Institute, 2023; US-China Business Council, 2018.
Kamala Harris has criticized Trump’s tariff plans, while signaling a willingness to maintain protections in key sectors such as electric vehicles and semiconductors. The policy landscape remains contested, with widespread debate about how to balance national security, consumer welfare, and a highly interconnected global economy — citation: Harris campaign, 2024.