Guest Contribution: “Protectionism Is Nothing New for Republicans”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate.

Critics of President Trump’s aggressive trade policy have mostly gotten it right. His tariffs cause economic damage at home – raising the cost of living for American consumers, hurting industry, and taking foreign sales away from farmers and other exporters. Moreover the threats have been deployed erratically across trading partners and across time in ways that seem calculated to discourage cooperation with the US and rather to isolate the hitherto leader of the free world from even its closest allies.

But one sometimes hears that these tariffs are a complete departure from historical Republican orthodoxy. This is not quite right.

It is true that Republican politicians in recent decades have tended on average toward free-trade philosophy more than have Democratic politicians. But during most of the first 100 years of its existence, the Republican Party was protectionist in both word and deed. Even in the most recent half-century, despite free-trade rhetoric, the three presidents who arguably took the most aggressive protectionist actions, even before Trump, were surprisingly all Republicans.

The Pro-tariff Origins of the Party

The Republican Party favored high import tariffs from its birth in 1854, as had its predecessor, the Whigs. The party reflected the economic interests of manufacturers in the Northeast who wanted protection against highly competitive imports from Europe. The Democrats were the pro-trade party. They represented agriculture-exporting states. Farmers needed neither textbook trade theory nor concrete retaliation by foreign trading partners to figure out that barriers to imports were bad for them economically. This is all made admirably clear in Doug Irwin’s authoritative, yet highly readable, recent history of US trade policy, Clashing Over Commerce (University of Chicago Press, 2017).

From the Civil War until the eve of World War I, the Republicans usually dominated the government. As a result average U.S, tariffs were set high, as high as 50 per cent. Irwin explains that during the first 70 years of American history, the dominant philosophy had been to set tariffs no higher than needed to raise revenue, but that when the South lost power to the North in the Civil War, restriction to protect manufacturing interests from import competition explicitly became the dominant motive. Some elections were fought largely over the tariff issue, such as the “Great Tariff Debate” of 1888, when a Republican victory led to the McKinley Tariff of 1890. Other highpoints of Republican trade policy included the Morrill Tariff of 1861 and the Fordney-McCumber Tariff of 1922 [which helped raise tariffs from 16 % in 1920 to 36% in 1922].

The two Congressmen who gave their names to the infamous Smoot-Hawley tariff of 1930 were both members of the Grand Old Party. So was President Herbert Hoover, who signed the legislation despite the objections of virtually the entire economics profession. (1,028 economists put their names to a petition urging Hoover to veto it.) The average tariff rate was raised to 48%. The consequences are well-known. Other countries rapidly retaliated and emulated this aggressive act of protectionism. Partly as a result, world trade collapsed over the subsequent years (down 60% by 1932), helping to put the “Great” into Great Depression and facilitating the rise of rabid nationalism in Germany and Japan.

The Rise of Free Trade

The transition to a more enlightened period of mutually agreed tariff reductions began when Cordell Hull, Franklin Roosevelt’s free-trader Secretary of State, pushed through the Reciprocal Trade Agreements Act of 1934. It set the stage for the subsequent trend of trade liberalization.

After World War II, the isolationists were in retreat. Even so, Republican Senator Robert Taft helped kill the International Trade Organization in 1950 which had been negotiated under US leadership to help liberalize world trade. As recently as the 1962 Trade Expansion Act and 1967 Kennedy Round of multilateral tariff reductions, Democrats tended to support trade liberalization more than Republicans.

Positions shifted during the 1970s, to be sure. Since then there have clearly been more protectionists on the Democratic side of the aisle of Congress than on the other side. When presidents of either party have negotiated international agreements to reduce trade barriers, they have usually had to rely heavily on Republican votes to get Congressional approval.

Nixon, Reagan and Bush

But the three presidents who arguably took the most aggressive actions to interfere with free trade in the last 50 years were all Republicans: Richard Nixon, Ronald Reagan, and George W. Bush. Trump has gone extraordinarily far beyond them; but it is worth noting that his tariffs are not without modern precedents.

In August 1971 Nixon blind-sided US trading partners by imposing a 10% surcharge on imports and embargoing essential foodstuffs to Japan. This “Nixon shock” was part of the same “New Economic Policy” that included wage price controls and the closing of the gold window.

Reagan was a free trader, right? He thought he was. But his administration gave in to political pressures. Most egregiously, it forced Japan to adopt so-called Voluntary Export Restraints on auto exports to the US in the early 1980s. Other moves followed, including against imports of steel, textiles and apparel. To quote Bill Niskanen, a Member of Reagan’s Council of Economic Advisers, “…the administration imposed more new restraints on trade than any administration since Herbert Hoover” [Reaganomics: An Insider’s Account of the Policies and the People (Oxford Univ. Press), p.137].

Similarly, Bush in 2002 imposed steel tariffs of up to 30% under “safeguards” protection even though the industry blatantly failed to meet the legal requirements for it. Bush knew that the WTO would rule the tariffs inconsistent with US obligations and they would have to be removed; but he also knew that would take time. The tariffs had the same adverse effects on the US economy that Trump’s tariffs will have today, raising costs in steel-using industries like autos where they cost more jobs than they saved in steel. The steel tariffs and other measures goods led Bruce Bartlett, another former Reagan official, to suggest in 2006 that it was he, Bush, who had the worst record on trade since Hoover. [Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday), Chapter 5.]

In short, Trump’s fondness for tariffs has some precedent, not just in early Republican history but also in the actions of some of the party’s more recent presidents. There is an analogy with fiscal policy. The presidents in recent decades who have arguably taken the most steps to lastingly raise the federal budget deficit have been Republicans. It is as if the two parties have traded places.

Actually, fiscal policy is more than an analogy. The rise in political pressure for protectionism during the Reagan Administration was largely a reaction to record trade deficits which in turn originated in his record budget deficits. Today, Republican fiscal stimulus is again leading to larger budget and trade deficits.

Free-trade Republicans as well as protectionist Democrats – there are plenty of Americans in both categories – are unhappy to learn of the history of tariff policy. It is awkward when the “good guys” and “bad guys” don’t line up in the neat way that is desired. But this is a stubbornly common pattern in history. After all, as many people already know, Abraham Lincoln was a Republican.

This post written by Jeffrey Frankel.

40 thoughts on “Guest Contribution: “Protectionism Is Nothing New for Republicans”

  1. PeakTrader

    More Democrats seem to support Trump’s position than Republicans:

    Chuck Schumer:

    “The president’s actions on China are on the money. China is our real trade enemy, and their theft of intellectual property and their refusal to let our companies compete fairly threatens millions of future American jobs,” Schumer said in a statement on Friday.”

  2. pgl

    Excellent essay. Doug Irwin’s writings are well worth the read and Bruce Bartlett may be the last of the honest conservatives.

    1. Moses Herzog

      @ pgl
      You and I see eye-to-eye on Bruce Bartlett. You know who annoys the F___ out of me??? David Stockman. David Stockman tries to pass himself off as a Bruce Bartlett type, but he is the wolf in sheep’s clothes. He’d sell out his own mother if the wind was blowing the right direction or a job was held out in front of his nose carrot-style.

      1. pgl

        Stockman was a history major so how was he qualified to run the OMB? He wasn’t. After his failed career in government, he went to work on Wall Street where he was prosecuted for defrauding investors. And even then he continued to write right wing BS.

        So you are being too kind to this nut job.

  3. pgl

    “When it comes to economic policy, Republican and Democratic administrations have switched places since the 1960s. The Republicans,
    who were so long identified with free markets and less-is-more government, have become the party of fiscal profligacy and market intervention. Democratic presidents have (by comparison) become the agents of fiscal responsibility and arms-length microeconomic policies” – from the Trading Places link.

    Trump like Reagan was desperate to cut taxes for the rich and spend more on defense. So hey – a substitute revenue base was needed. Reagan raised payroll taxes but at least he respected Social Security benefits. Today’s Republicans want to continue to tax employment but they want to slash Social Security benefits.

    One could argue we need tariff revenues. That was certainly want Alexander Hamilton did but back then we did not have a Federal income tax. We do now but the GOP mantra is taxes are for the little guy. It would not be prudent to tax rich people who need their Hampton vacations.

  4. 2slugbaits

    “…reaction to record trade deficits which in turn originated in his record budget deficits. Today, Republican fiscal stimulus is again leading to larger budget and trade deficits.

    This is something that most people do not appreciate. Chronic trade deficits are not due to “unfair” competition or “weak” leadership or being played for a sucker. Chronic trade deficits are a macroeconomic phenomenon. I suspect the man-on-the-street doesn’t get this because it doesn’t square with the household analogy, which is how most people interpret economics.

    Whether a politician is pro free trade or protectionist is less about political party and more about geography…at least until the current GOP fell under the spell of Trump’s cult of personality. Until recently congress critters representing districts on both coasts tended to be pro free trade while congress critters in the middle of the country tended to be protectionist.

  5. pgl

    Greg Mankiw wants us to listen to this 73 seconds of St. Reagan praising free trade:

    Nice words but 2 problems. As Frankel notes, the Reagan record did not match his words. And Reagan claimed our 1776 revolution was all about free trade. I’m sorry but this shows no knowledge of our economic history.

    I would post a comment asking Mankiw to read Frankel’s post but Mankiw’s blog does not allow for comments.

    1. Moses Herzog

      @ pgl
      Mankiw force-feeds his students right-wing rubbish, Mankiw expects students to smile as he force-feeds them right-wing rubbish—and then Mankiw grades them on regurgitating right-wing rubbish. But you’ll never see or hear Mankiw take the criticism that Professor Chinn does, or Paul Krugman, or Yanis Varoufakis or on and on, the list is endless. When a right-wing economist forces personal opinions on students we bathe it in the American flag and apple pie, and when a Democrat economist or even a slightly left leaning economist gives views backed with empirical evidence, the illiterates rise up and scream “socialist!!!” just like FOX news has trained them. We can’t have anything wavering away from the Mankiw doctrine that we should all sit around worshipping the wealthy for collecting interest on their bank deposits. Even better for Mankiw if they got it by inheritance, as in Mankiw’s view that shows extraordinary skill on their part.

      Funny, how the monopolistic power that college professors and textbook companies have to charge students over $150 for books that likely costs less than $35 to produce doesn’t seem to bother the hypocritical bastard who runs around extolling the virtues of the “free market”. Mankiw wouldn’t have the smart-a$$ arrogant mouth he does if he didn’t collect that monopolistic textbook rent off his students. Let there be no doubt on that score.

      1. pgl

        Mankiw’s first macroeconomic text book had an excellent and very critical review of Reagan’s toxic macroeconomic mix during Reagan’s 1st term. But it seems this discussion has not quite made the new editions after he started drinking the Kool Aid.

        1. 2slugbaits

          Mankiw also wrote a cute paper on the parable of the debt fairy. That was a long time ago.

  6. dwb

    Republicans under Reagan in the 1980s were only for free trade to the extent that they believed it would break private sector unions and reduce Democrat power.

    Now, the problem has a somewhat different characteristic. The flip side, foreign direct investment, supports a lot of jobs in “blue” states – California, New York, PA. The trade deficit since the 1980s in many ways has been a tremendous geographic reallocation. I see this as closely tied to immigration as well – urban areas get a lot of foreign direct investment which in part drives a need for immigration. A double whammy for flyover country: losing jobs, and some companies would rather hire HB-1 visa holders than republicans.

    People seem to have woke up in 2016 and want the trade deficit fixed. By fixed I mean reduced substantially. Along with rising wages. There are only so many ways that can happen. Tariffs are a bad plan, but a bad plan beats no plan every time. Critics of tariffs in my opinion will go ignored until they can suggest an alternative to reduce the trade deficit.

    1. 2slugbaits

      dwb People seem to have woke up in 2016 and want the trade deficit fixed.

      No they don’t. Most people don’t even know what a trade deficit is. This is supposed to be an econ blog, but yet a lot of the commenters here don’t even understand the difference between a trade deficit and a trade goods deficit. It took a week of explaining the difference before they finally caught on. Well, I guess that’s progress. Most people also say they don’t want large budget deficits, but yet they vote for politicians who cut taxes and raise spending. Most voters don’t understand the relationship between chronic trade deficits and saving/investment imbalances. Most voters don’t have the faintest clue about macroeconomics & international trade. None. Zilch. Nada.

    1. pgl

      As soon as one opens this link a picture of W-I-L-B-U-R Ross pops with this subtitle:

      ‘Trump official: Tariffs won’t hurt the economy’

      Leave it to PeakDishonesty to promote the blatant lies of his boss!

      BTW – we don’t have infant industries that face Chinese competition but we do have infants like PeakyBoo.

  7. CoRev

    You said Trump was the new Hitler… …That was a lie.
    You said Trump was a dictator… …That was a lie.
    You said Trump was a fascist… …That was a lie.
    You said Trump was a threat to democracy… …That was a lie.
    You said Trump was unfit to be president… …That was a lie.
    You said Trump would start World War III… …That was a lie.
    You said Trump was a racist… …That was a lie.
    You said Trump was anti-Semitic… …That was a lie.

    OK. So Trump has bad manners. We will grant you that.
    But now you say that people who voted for Trump are like cult followers… (!?!)

    You still don’t get it, do you?… …We never voted FOR Trump!
    The whole time, we were voting AGAINST YOU!

    When the far left speaks, moderates move to the right.

    1. 2slugbaits

      You still don’t get it, do you?… …We never voted FOR Trump!

      Well, you’re sort of right. The voters went for Clinton. It was the Electoral College that voted for Trump.

      But now you say that people who voted for Trump are like cult followers… (!?!)

      I believe it was a Republican senator who first noted how cultish today’s GOP voter has become.

      Even Trump’s friend and co-author of “The Art of the Deal” agrees that something is deeply wrong with Trump’s mental state. And Friday’s lie-a-thon doesn’t help Trump’s case for possessing all of his mental faculties. His friends should stage an intervention…maybe Trump could turn that into yet another reality TV show.

      I don’t know if Trump is a threat to democracy, but many of his supporters sure are. And Trump is not (yet) a dictator, but it’s not for a lack of trying. He sure seems to admire the caudillo style of leadership. As to the other things you said Trump is not…give it time. He’s still got another 32 months in office.

      1. pgl

        The rant of CoRev’s was so off the wall I’m beginning to wonder when they will take him off to the rubber room.

    2. baffling

      trump is a racist, racist and anti-semite. you are wrong on those counts corev. please deal with reality. is he a dictator? his desire to have his people behave like the north koreans to their leader-god would indicate some truth to this statement. he said it, i did not make the words up. cult followers? corev and peaky are examples 1 and 2.

        1. Moses Herzog

          @ The Rage
          I think you’re getting him mixed up with his daughter and her conversion for the marriage. We got another Russian troll here?? WOW.

          As far as I know trump has 0% Jewish blood. trump is way too damned dumb to be Jewish. And I say that as a non-Jew myself.

          And most conservative Jews will tell you there is no such thing as a “half-Jew”. They tend to take that stuff very formally and sacredly. Even ones whose fathers are 100% jew and mothers are not—they will basically tell you to go take a hike as far as “membership” to the “tribe”.

  8. Lord

    Free trade means protectionism for friends, free trade for others, it is just others vary. Intellectual property, professions, and political power are about protectionism, while free trade is for the rest.

  9. Moses herzog

    We keep getting told the Mueller investigation is going on “too long”. If that’s true, why does new information keep coming out about illegal activities happening as recently as 2016?? Of course who does Roger Stone talk to about it?? Not the man Stone normally congregates with to collect money from the village idiots (Alex Jones), but “the enemy”–>>Washington Post. I wonder how the fat pudgy guy with the frog neck feels about that?? NOTE: That last part is not a Trump reference.

    Folks, in case you don’t understand what “waste of time” means in this context, what it means is that after an attempt to collude with foreigners (Russians) to influence American Presidential race results, Roger Stone didn’t think the information was good enough to have a material impact on the Presidential race. That’s what “waste of time” translates to.

    BTW, If you wanna have an ugly frog neck and be overweight about 50 pounds, pick up some Alex Jones supplements on his website, they seem to do the trick:

    1. Moses Herzog

      Republicans can sell anything or demonize anything, And they can demonize the same policy they were marketing 3 months before. All Republicans need is to put the policy nearby to a rifle, an American flag, the Bible, a framed picture of Saint Ronnie Reagan, and a loud talking white guy that eats his own boogers on LIVE TV.

      I’m not lying—-> I involuntarily gag about 98% of the time I watch that. Seriously, other than to show people what these guys are—it’s better not to look or click.

  10. PeakTrader

    Communist and socialist politicians need protectionist trade policies, because they need jobs, much more than the U.S..

    So, they’re unwilling to accept a level playing field.

    And, they’ll lose much more in a trade war with the U.S..

    The solution may be those leftist countries moving to the right.

    1. PeakTrader

      Communist and socialist governments wield too much control or power over the private sector.

    2. pgl

      “GOP thinktanks are the biggest milksops. From healthcare policy to environmental policy, from national security policy to fiscal policy, they have tacitly endorsed a mountain of anti-market + anti-growth + anti-America policies to not upset their political masters.”

      Oh wait – someone dares tell the truth. Would never hear this from PeakDishonesty.

    3. 2slugbaits

      PeakTrader Communist and socialist politicians need protectionist trade policies

      Really? Ever read anything on Lenin’s New Economic Policy? It was based on expanded trade with the west. That’s why the Leninists stole and sold off the tsar’s art and jewels. Lenin thought that imperialism was the last stage of capitalism, so he was all in favor of trading with imperialists. He wanted to buy the rope from them and then use it to hang them. You might want to read a little on the subject. There’s a good (fairly) new book by Sean McMeekin on “The Russian Revolution”.

      because they need jobs

      Not exactly. The old Soviet Union suffered from many economic problems, but unemployment wasn’t one of them. We’re the ones who erected trade barriers with communist countries and not the other way around. I’m pretty sure that Venezuela and Cuba and North Korea would be more than happy to trade with the US.

      1. baffling

        2slugs, you are constantly correcting folks like corev and peaky. somebody with a sense of humility would stop making the absurd and incorrect statements which you waste your time on, but not these trolls. these guys make false statements, and continue to do so shamelessly even after being corrected. reminds me of another guy, wait a minute, oh donnie trump. peak and corev, is this the type of behavior you want your grandkids to see and mimic? from peaky’s comments, it is clear he is still living in the early 80’s with his ideological understanding of communism and socialism. over several decades, one would hope he could have educated himself better. but nooooo, he simply moved on to the demise of the world financial system. and then when he found himself unemployed, decided to impart his ignorance of the world in the blogosphere. using somebody else’s blog because he has no audience of his own. what a sad creature.

      2. PeakTrader

        2slugbaits, if the communist leaders in China don’t keep the masses employed, there will be a rebellion.

        Socialist Europe has low employment.

        Protectionist trade policies preserve jobs.

        The old joke in the Soviet Union was they pretend to pay us and we pretend to work.

          1. baffling

            just like with corev, they present incoherent commentary that typically contradicts itself. but that does not seem to bother them in the least.

      3. Ed Hanson


        There was a common saying heard in communist countries. It was something like this especially when the topic of poor production and price determination by bureaucrat decision. “We pretend to work and they pretend to pay us.” I understand how someone who spent much of a career in government employment can think this solves unemployment.


  11. Moses Herzog

    On this Father’s Day, let’s try and remember the good guys. The guys who always make time for their children. The guys who cultivate a relationship with their kids. The guys whose children’s faces literally light up when they see them. No, not the Orange Menace whose wife and son moved into the White House over 5 months after he did. But you get half-credit for a good guess anyway.

    Not certain if that heart-warming father-daughter moment was before or after Ted Cruz tweeted out the Cory Chase porn scene. Since I “never” look at porn, I’ll have “one of my staffers” update in this thread later.

  12. The Rage

    Global capitalists like “protrctionism” when it benefits them. Manipulation of capital markets is their real goal. People miss this persistently.

    1. Moses Herzog

      @ The Rage
      Excellent point. They change the rules when it suits them. I think Menzie gets this (subconsciously if nothing else) and some other observers do also. But your point is well made and important to express. Frankel actually makes that point above, although in a more “roundabout” way or abstract way then you did. It’s also probably why Frankel is pointing to some of those history books he mentioned. Those books Frankel mentioned kind of showed over the “long arc” how those “rules” or “stances” “conveniently” change for the rich—and some Universities that “do their bidding” [George Mason U for example]

      PS When is your issue #1 comic book coming out??

  13. David O'Rear

    Washington is unhappy with Beijing.
    So, Washington inflicts billions of dollars of extra, unnecessary costs on American companies and consumers who buy things made in China by foreign-invested firms.

    That, in a nutshell, is today’s world.

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