By Mari Hansen The dispute came to an end at some point without anyone making a formal concession. For thirty years, free trade was viewed in Washington less as a matter of policy and more as a kind of secular religion that serious people adhered to, much like they did with independent central banks or NATO.
Now, you can stand in a steel town in eastern Ohio on a Tuesday morning in May and hear a Republican senator and a Democratic congressman say almost exactly the same thing about Chinese imports; the only real distinction is the volume.
| Item | Detail |
|---|---|
| Subject | US Tariff and Trade Policy |
| Current Average US Tariff Rate (2025) | Highest since the late 1930s |
| Historical Peak | Smoot-Hawley Act, 1930 |
| Key Institution | World Trade Organization (founded 1995) |
| Pre-WWII Tariff Levels | Often above 40% on manufactured goods |
| Modern Turning Point | 2018 (Trump steel and aluminum tariffs) |
| Bipartisan Continuation | Biden retained most Trump-era China tariffs |
| Current Administration Position | Tariffs as central industrial policy tool |
| Largest Affected Trading Partner | China |
| Policy Frame | National security, reshoring, revenue |
Even though it seems like it happened overnight, that convergence took time. The shift has been quiet, at times almost embarrassing. Policymakers seem to be aware that they are giving up something, such as the postwar consensus, the confidence of the WTO era, or the notion that everyone would benefit from the rising tide, but they are unsure of what they will replace it with. Tariffs for the time being. subsidies for industry. Strong, ambiguous words about supply chains and resilience. We might be witnessing a managed retreat rather than a cohesive doctrine.
This place has a more complicated past than the current discussion makes clear. Under the regulations it later spent fifty years selling to everyone else, the United States did not develop into an industrial power. For the majority of the nineteenth century, tariffs higher than forty percent were common.
Every economics undergraduate learns the cautionary tale of Smoot-Hawley, which is typically told as a tale of catastrophe, but it landed in a nation with deeply ingrained protectionist tendencies that didn’t completely fade until the Cold War rearranged everyone’s priorities. To put it another way, the free-trade era was the exception rather than the rule.
Globalization wasn’t so much born in the 1990s as it accelerated. The Uruguay Round and the creation of the WTO gave transnational capital something it had wanted for a long time: a binding legal architecture that traveled across borders better than workers ever could. While discreetly maintaining carve-outs for steel, textiles, and agriculture, American negotiators pushed hardest in industries where US companies had an advantage, such as services, finance, and intellectual property. “Do what I say, not what I do” wasn’t rude. It was true.
Any small manufacturing town that lost its anchor employer between 1998 and 2012 can see the effects. The texture of the so-called China Shock is unfamiliar, but the data is. parking lots behind plants that are empty and still have signs. the manner in which younger people stopped returning home after graduating from college. The politics changed for a reason, and it had nothing to do with anyone in Scranton or Mar-a-Lago suddenly reading Ha-Joon Chang.
Tariffs were loudly announced by Trump. Everyone notices that part. However, the CHIPS Act, the Inflation Reduction Act, and a number of export restrictions that were unthinkable in 2005 were maintained by the Biden administration. The tariff rate is currently at levels not seen since before World War II under a second Trump term, and the Democratic response has focused more on adjustment than reversal. It appears that investors view this as the current operating environment rather than a diversion.
It’s genuinely unclear if any of it works—that is, if it rebuilds industrial capacity rather than merely penalizing trading partners. There is a real increase in factories in Ohio and Arizona. Higher consumer prices, reprisals, and tension within once-automatic alliances are all examples. It’s difficult to ignore how much of the outdated vocabulary has been quietly retired as this develops. These days, no one discusses “the rules-based international order” with a straight face. They discuss leverage.
What protectionism is really for this time is the deeper question, which neither party seems eager to address. Is it a tool to discipline China? A bet on American laborers? A source of income, as the current administration occasionally implies? Or just the political fallout from an overly ambitious and unevenly delivered globalization? It could be all of these at once, which is the type of response that policy struggles with.
We feel as though we are in between paradigms rather than within one as we move through this moment. The ancient faith has vanished. No one has written the new one yet. Meanwhile, practically everyone in Washington nods as the tariffs continue to rise.