A recent advertisement by the Ontario government has reignited discussions surrounding trade policies once championed by former U.S. President Ronald Reagan. The new ad features a video clip of Reagan’s original radio address from April 25, 1987. Politically savvy, his deep opposition to tariffs emerges in the form of passionate defense of free trade principles. This has received a lot of attention and push back, especially from those who advocate current day tariff tactics.
In his 1987 speech, Reagan articulated this principle unequivocally. He contended advanced economies had largely left behind the use of tariffs as a productive economic lever. He was right that tariffs make domestic companies more reliant on government intervention, which in the end suffocates true competition. “We had clear evidence that Japanese companies were engaging in unfair trade practices that violated an agreement between Japan and the United States,” he stated, highlighting the tensions surrounding trade with Japan during that era.
Presidential candidate and free trade advocate Ronald Reagan warned than new tariffs could start trade wars, resulting in even higher tariffs and mounting costs for American consumers. Without question, he believed all of these protective measures would increase costs. Even more, he was afraid they would lead to layoffs of American employees. Despite having imposed higher tariffs on various Japanese products prior to this address, Reagan maintained a cautious approach towards trade barriers. He was most “loath,” however, to impose limits on Japan, arguing that American firms should be treated fairly.
The wisdom of Reagan’s speech comes in sharp focus amid the current wave of tariff declarations. In fact, just before his planned radio address he raised the tariffs. This decision was made in the context of cheap Japanese semiconductors flooding the U.S. market. There was one big problem – his administration had almost always been a strong advocate for free trade, with notable exceptions. He singled out the Democratic-controlled Congress for advancing legislation that threatened to create new trade barriers on other countries.
The Ontario government is implementing a new ad campaign. Their goal is to use Reagan’s evergreen opposition to tariffs to court-battle today’s trade abuses. Ontario Premier Doug Ford expressed his support for the ad, stating, “Take Ronald Reagan’s words and let’s blast it to the American people.” He acknowledged that the ad might go on the offensive, saying, “It’s not a nasty ad.” Ford further praised Reagan, calling him “the best president America has ever seen in my opinion.”
Reagan underscored the significance of mutual respect among trading partners, asserting, “We expect our trading partners to live up to their agreements.” That sentiment rings true today as discussions about trade agreements and tariffs remain at the front lines of political conversations.
The ad promoting commercializing Reagan’s message has been running on all big four broadcast U.S. television networks. Its purpose is to manipulate public opinion against tariffs and pro American trade policies. What an amazing difference between Reagan’s historical perspective and today’s pernicious debates. This is a living example of the heightened complications of today’s international trade.
