Former Presidents Ronald Reagan and Donald Trump did this with tariffs. All three leaders were focused on what they could do to act unilaterally, without depending on Congress. While Reagan’s presidency was marked by a commitment to free and fair trade, Trump’s stance has been characterized by significant tariff threats that he has justified through various controversial claims.
Reagan, president from 1981 to 1989, made free trade the central theme of his administration. In a speech delivered in 1987, he articulated a clear opposition to protectionist measures, stating, “Protectionism is not the way to resolve our trade imbalance.” This sentiment embodied Reagan’s conviction that free and open markets were the keys to prosperity and abundance.
So despite his commitment to free trade principles, Reagan was willing to use tariffs when he felt it was warranted. For instance, in 1987 he ordered tariffs against Japan. He pointed to the nation’s inability to live up to a similar agreement made in 1986. These tariffs featured an eye popping 100% tariff on Japanese laptops, power tools and television sets. Yet even so, the officials from his administration indicated they were loath to pursue those punitive measures. At the same time, they knew they had to do something, given the situation.
Reagan’s approach diverged significantly from Trump’s. Trump has portrayed steep tariffs as a means to restore American manufacturing. He has further threatened the world with billions of dollars of tariffs, arguing that these measures are in American national interests. His claims about tariffs have been right out there on the fringes. Perhaps the most ridiculous claim of all is the one about Denmark allegedly not selling Greenland to the U.S.— a pretext he uses to justify slapping on trade barriers.
Though Trump has taken credit for their effectiveness himself, Reagan was frequently warning about the dangers inherent to this approach. The former president lamented the folly and counter-productiveness of trade wars, which fracture economic ties. His favorite punching bags were the usual historical examples of protectionism. In particular, he felt that the Smoot-Hawley Tariff Act of 1930 deepened the Great Depression. In 1985, for example, he detailed his desire to avoid new tariffs, noting that he was “loathe” to go down that path.
In sharp opposition to Reagan’s philosophy, Trump has adopted tariffs as a key component of his economic policy. This has resulted in long-running tensions with key trading partners and fears that they would impose retaliatory measures. Rather than engaging in partisan intimidation or disinformation, Reagan appealed to promote goodwill and uphold mutual responsibilities. In contrast, Trump often welcomed the fight, leading some opponents to charge him with political demagoguery.
Reagan noted that “today, protectionism is being used by some American politicians as a cheap form of nationalism.” He argued that “so-called protectionism is almost always self-destructive, doing more harm than good even to those it’s supposed to be helping.” That sentiment certainly rings true through the decades. It serves as a cautionary tale about the perils of putting short-term political gains ahead of long-term economic vitality.
Howard Baker, a prominent figure in Reagan’s administration, once remarked, “Nobody wants a trade war, but nobody wants to be a patsy either.” This short sentence captures the tightrope that our leaders will need to walk if they decide to pursue punitive trade policies. Yet both Reagan and Trump were under tremendous pressure from their political bases. Their approaches eviscerate a huge gulf in American trade policy.
