Photo by Saul Loeb/AFP
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The theory of protectionism suggests that governments ought to fortify domestic labor by increasing tariffs or restricting imports to shield domestic labor in resistance to globally integrated economic markets. Within recent years, this theory has become mainstream in Western countries. With the popularization of protectionist politicians such as former President Donald Trump in the U.S., Marine Le Pen in France, and Boris Johnson in the United Kingdom, many voters have expressed dissatisfaction with global economic integration, leaning instead toward a more nationalist ideology.
While many supporters of protectionism are from conservative parties, not all conservatives are necessarily supporters of protectionism. Some analysts, such as Gideon Rachman, the chief foreign affairs columnist for the Financial Times, have suggested that protectionist policies may be implemented in the U.S. regardless of which party prevails in the 2024 elections. Rachman contends that U.S. policymakers fear economic, social, and political stability is at risk due to international trade. As a result, both Trump and President Biden, currently the most popular presidential candidates, are embracing a more nationally focused economic system.
Rachman argues that the candidates’ support for domestic working-class labor alongside protectionist policy displays this ideological shift. While in office, former President Trump enacted controversial tariffs on foreign products and is currently advertising plans to continue to expand on these protectionist policies within his presidential campaign. President Biden has preserved Trump’s policies and focused investments on domestic labor with policies like the American Rescue Plan Act, the Infrastructure Investment and Jobs Act, the Creating Helpful Incentives to Produce Semiconductors and Science Act, and the Inflation Reduction Act. Both candidates focused their energy on domestic blue-collar workers by attending the recent United Auto Workers strike. President Biden became the first sitting president to attend a UAW strike and reminded audiences that he had participated in multiple UAW pickets as a senator, presenting himself as a longstanding ally of the American working class. Similarly, Trump demonstrated his support of the union by skipping the second Republican debate to attend the picket in solidarity with the UAW. While focusing on industrial policy related to the domestic working class, specifically auto workers, and seeking to protect them from being replaced by international workers while encouraging the purchase of American goods, the U.S. has maintained high tariffs on cars produced in China and the European Union.
While these policies may seem appealing to the domestic working class, analysts suggest that this policy could be detrimental on a global scale and within the U.S., potentially impacting American consumers. In 2019, the BBC warned that tariffs imposed by Trump could “hurt other nations’ economies and lead to rising political tensions …. [putting] the world’s largest economies at each other’s throats.” When one country imposes a protectionist policy, other countries will likely retaliate by instituting a similar policy to encourage others to lower tariffs to expand markets internationally, benefiting consumers. As an example, Rachman points to European car manufacturers. He suggests that if European countries were to create protectionist policies by imposing tariffs on Chinese vehicles to encourage the Europeans to purchase vehicles made in Europe, China might choose to retaliate and impose a similar tariff on European vehicles. With this, the U.S. choosing to nationalize its economy could result in other countries raising tariffs on U.S. goods, making it more difficult for American companies to sell their products internationally.
Furthermore, consumers could be hurt by these tariffs because competition is vital to maintaining low prices for consumers in a capitalist economy. If a larger number of companies create the same product, companies must lower their prices to make their product more desirable than other brands based on the principle of supply and demand. If the U.S. imposes more protectionist policies to protect U.S. companies, these companies will have less competition with international companies. They can raise their prices while still being comparatively cheaper than products produced internationally. As a result, consumers may be forced to spend more on domestic and international products.
In this framework, tariffs may benefit the laborers in the sector of the economy producing products that are protected by them but will not benefit laborers in other sectors, as they are forced to pay more for these products. Even the laborers that benefit from tariffs could be harmed if other countries retaliate by raising tariffs, as the company will then lose out on international sales and may have less money to spend on labor as a result.
Beyond the immediate impact of countries imposing tariffs as retaliation, though, can come broader tensions between international economies. According to Jeffrey Anderson of Foreign Policy Magazine, tariffs imposed by the U.S. have increased tensions between the U.S. and European countries over other political issues, including environmental policy. Trade often acts as a unifying force between countries, encouraging interdependence and collaboration. A loss of this trade results in fewer incentives for countries to preserve positive relations. As a result, the U.S. is forced to collaborate with some countries due to our reliance on them for certain goods. However, a loss of this trade would result in fewer incentives for these countries to preserve positive and constructive relations with the U.S. Based on this, Anderson argues that both global economic and political strength could be compromised if countries begin to isolate themselves.
Conversely, Anderson suggests that there may be certain benefits of protectionist policy in the U.S. Anderson points to the benefits of protectionism on the environment in that localized trade could reduce emissions and increase transportation efficiency. If products are produced and purchased locally, fuel would be preserved due to shorter distances traveled, and consumers would pay less for the shipping costs often built into the price of products produced internationally.
Beyond this, Anderson views increased protectionism as potentially beneficial for local markets receiving more focus and attention from national governments. Building up stronger local and regional economies within a nation, he argues, will make the U.S. a better trading partner as industries within the U.S. can build economic strength that can later be channeled into global markets.
While some economists have considered the implementation of protectionist policy as a reality regardless of the election’s outcome, it seems likely that President Biden’s policy would not involve dramatic changes to tariffs or include aggressive protectionism. While it seems that Biden will maintain the Trump-era policy based on his current “Bidenomics” plans, his focus for the future, if re-elected, seems to be focused on domestic reform and aiding the American middle class. Much of his policy involves investing in projects and legislation that will help laborers in the U.S. without being antagonistic towards international trade. In a statement, Biden exhibits his plans for future economic policy without mentioning tariffs or protectionism, advertising other solutions to help American workers. He articulates more than once that he plans to focus investments on small businesses, public investments, and infrastructure, and he seeks to create stricter regulations on large corporations in favor of small businesses and individuals.
In a press release, Biden’s administration further emphasizes his plans to focus more heavily on domestic trade. Brenda Mallory, Chair of the White House Council on Environmental Quality, stated in the release that “President Biden believes that when [the administration] [spends] American taxpayers’ dollars, [they] should be investing in America,” and declared that they will be investing in products made within the U.S. The administration’s statement focuses exclusively on benefiting Americans and suggests that Biden prioritizes domestic trade, but the administration makes no claims suggesting direct action against international trade.
By contrast, Trump more directly advocates for the protectionist policy, with a section of his campaign website titled “Reject Globalism and Embrace Patriotism.” Trump asserts that if elected for a second term, he will elevate the global standing and leadership of the U.S. through “bold diplomacy and principled realism.” Although the website makes no explicit claims about what his protectionist policy will look like, Trump cites his restrictions on immigration, the withdrawal from the Iran Nuclear Deal, and brokering of Middle East peace deals as foreign policy successes during his first term. He also declares in his mission statement that he seeks to “[fix] globalist trade deals” and will not “allow other nations to take advantage of [the U.S.] [through] trade.”
Based on their expressed plans for secondary terms, the candidates are both heavily focused on domestic trade and labor but diverge in their foreign policy goals, with Trump taking a much more assertive approach than President Biden. With this in mind, it seems likely that the large-scale impacts addressed by the aforementioned economists are most likely to be realized in the event of Trump’s re-election.
According to Reuters, the tariffs created by Trump in his first term burdened the global economy, leading to industrial job losses and the decreased export of American products. Retaliatory tariffs were implemented, making it more difficult for American companies to export their products. Considering these impacts, in addition to his substantial proposed increase in tariffs, a second term with Trump in office would lead to drastic changes within the domestic and global economies and likely lead to many of the negative effects addressed by Anderson and Rachman.
Although Trump created this policy, Biden also did not take any action against these tariffs regardless of the impacts they had on the economy. Biden also does not seem to have plans to increase global economic integration, meaning the existing effects of this policy will remain unchanged. Essentially, Biden is preserving protectionism as it exists while further focusing on building a stronger domestic economy without any increase in global integration.
Based on Biden’s lack of explicit claims about protectionism or restricting international trade, it seems unlikely that his second term would result in international tension and hostility with other countries. Without these factors, the dangerous impacts that economists have warned against, including geopolitical conflicts, increased consumer prices, and smaller international markets for American companies, would likely not occur if Biden is re-elected.
Although economists, including Rachman, have argued that these problems are somewhat of a universal phenomenon, regardless of which candidate is elected, Biden’s existing policy, as well as his policy goals for a second term, suggest that a heightening of protectionist measures under his administration is unlikely. Neither candidate, though, has expressed interest in globalizing or liberalizing economic policy, with domestic labor being central to both of their campaigns, seeking to sustain protectionism within U.S. trade.
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This article was edited by Matthew Quirindongo and Abigail D’Angelo
