In the run-up to the 2024 election, a lot of people were ringing alarms about Donald Trump’s tariffs. Kamala Harris called Trump’s policies a “tax on the American people” and warned of sky-high prices. According to the Nobel prize-winning economist Joseph Stiglitz, they are “very bad for America and for the world”. His fellow Nobel laureate Paul Krugman called them “small, ugly, and stupid”. More recently, the whirlwind tariff drama of the past two months – first a 25% tariff on Mexico and Canada, then a 30-day “pause” on that policy, a plan to raise tariffs on steel, aluminum and agricultural goods, plus an across the board tariff hike on China – has generated yet more frenzied debate about the danger of tariffs.
Observers aren’t wrong to criticize the US president’s policies. His proposed tariffs seem unlikely to improve what ails the US economy. Worse, applying tariffs as broadly as he’s proposed, and without any supplementary industrial strategy, does risk needlessly raising prices while acting like a big corporate giveaway. Yet, despite what elite economists say, tariffs can be sound, and progressive, economic policy.
