Tariffs are tools American leaders should have used to put Americans and American workers first. For the first time in decades, we will have a president willing to use them.

The specter of tariffs has spread amongst economists across the fruited plain. President-elect Donald Trump’s raising of the tariff issue is being interpreted as a call for autarky, or economic independence and self-sufficiency, not part of a negotiating strategy to achieve better trade deals and improved security for Americans. The reality, like many economic issues, is more complicated. The U.S. does not have a laissez-faire (zero tariffs) policy. Nor is Trump proposing a state of autarky (100 percent tariffs) to end international trade.

Tariff critics argue they have the potential to negatively affect U.S. businesses and consumers. One example is the domestic automotive industry based in Michigan, a manufacturing state key to Trump’s electoral victories in 2016 and 2024. Automotive supply chains extend into Ontario, Canada, and, further afield, to China. Auto firms have stated in filings with the Securities and Exchange Commission that tariffs could affect their operations. Ford’s last annual filing states that “tariffs applied to goods traded between the U.S. and China could materially and adversely affect our business and results of operations.” In its annual filing, General Motors said, “We … rely upon an integrated global supply chain to deliver the raw materials, components, systems and parts that we need to manufacture our products” and that “new or higher tariffs” could affect their operations.   

There are other industries that have sounded similar warnings. But critics overstate their case when they claim Trumpian tariffs will lead to economic disaster or even another Great Depression. These arguments are simplistic and ignore remarks by Trump in his books and speeches about using tariffs as a deal-making tool. It also ignores his first-term record in the White House.

Consider Trump’s bestselling 1987 book The Art of the Deal (1987), which is full of negotiating strategies. One of the book’s negotiation maxims is to expand your options by using leverage. Fast forward to Trump’s first campaign and presidential term. When discussing trade deals, Trump singled out the North America Free Trade Agreement (NAFTA), calling it “the single worst trade deal ever approved in this country.” He vowed to renegotiate it, a political promise that resonated with American workers, including those in Michigan, Ohio, Pennsylvania, and Wisconsin, a four-state bloc that voted for Trump in 2016, the first time they had voted for a Republican for president since 1984. 

Trump’s threat to withdraw from NAFTA led Canada and Mexico to agree to renegotiate the trade deal—it was a textbook case of maximizing your negotiating options by using leverage. Some of the same economists attacking Trump today predicted then that his threats to NAFTA would lead to disaster. They were wrong. The United States-Mexico-Canada (USMCA) trade deal that replaced NAFTA led to higher rules-of-origin requirements that benefitted American automakers and their workers. It also reduced the incentives to move factories to Mexico by raising environmental and labor standards.

The other part ignored by critics is that the longest U.S. economic expansion partially occurred on Trump’s first watch, starting in June 2009 under President Obama and ending during COVID in April 2020, according to the National Bureau of Economic Research’s (NBER) business-cycle chronology. The recession that followed during Trump’s administration was only two months—the shortest in U.S. history—ending in April 2020.

Trump is again preparing to use tariff proposals to maximize America’s leverage and expand its deal-making options. The 2024 Republican Party platform includes several references to tariffs. It calls for rebalancing trade, securing strategic independence from China, saving the American auto industry, bringing home critical supply chains, and becoming the manufacturing superpower. It calls for “baseline tariffs on foreign-made goods” and passing “the Trump Reciprocal Trade Act,” which, it proposes, will reduce taxes on American workers, families, and businesses as tariffs on foreign producers increase. 

Does President-elect Trump have this authority? Critics argue Article I, Section 8 of the U.S. Constitution gives Congress alone the “Power to lay and collect Taxes, Duties, Imposts and Excises.” But the legislative branch has ceded a great deal of authority to the executive since the 1930s: 

• The Tariff Act of 1930 granted the president authority to impose tariffs of up to 50 percent on imports from nations that discriminate against U.S. firms.

• The Trade Expansion Act of 1962 granted the president authority to adjust tariffs in the interest of national security.

• The Trade Act of 1974 granted the president authority to address large and serious balance-of-payments deficits. It also granted the U.S. trade representative appointed by the president authority to remedy unfair trade practices with tariffs and other policies.

There is an important role in trade for the legislative branch, however. The U.S. is a World Trade Organization member and party to various trade agreements that include specific tariff-related commitments. In these instances, the legislative and executive branches can work to set tariff policy by negotiating trade pacts and adjusting tariff rates.

Trump is a transactional wheeler-dealer, not an ideologue. His tariff proposals should be seen as part of his negotiating strategy, not through an ideological lens preferred by his critics. This can be seen in Trump’s dealings with U.S. neighbors Canada and Mexico, both of which he has strategically threatened with modest tariffs. Trump has threatened to renegotiate Canada’s participation in the USMCA, attacked “the massive trade deficit the U.S. has with Canada,” and questioned its commitment to fight “fentanyl pouring in from China.” Trump criticized Mexico for not stopping illegal immigration. The presidents of both Canada and Mexico immediately responded to Trump’s words and took meetings or calls with the incoming president-elect.

China is a more complicated case, and it remains unclear whether China views Trump’s threats to raise tariffs as seriously as did the leaders of Canada and Mexico. A threat must be seen as credible to move negotiations. Trump imposed tariffs up to 25 percent on various Chinese goods in 2018. His latest proposal would set tariffs on Chinese goods higher, at a 60 percent rate.

Tariffs on Chinese imports enjoy some bipartisan support. President Biden even maintained some Trump tariffs on Chinese imports, raised others, and imposed new levies on strategic goods. Critics of Trump’s Chinese tariff proposals have raised the specter of a trade war, invoking the Smoot-Hawley tariff, which is thought to have contributed to the Great Depression’s long, 43-month duration. These commentators ignore the fact that Trump is proposing tariffs during the fifth year of an economic expansion, not a contraction or a depression. Furthermore, economists, including Adam Smith, have always recognized that national security concerns create exceptions to an otherwise free-trade policy.

Critics’ claims about Trump’s tariff policy have more to do with their own economic ideologies than economic reality. America’s leaders should have always used tariffs as a tool to put America and the security of its citizens first; too many have been swayed by a priori reasoning, ideology and lobbyists. That is about to change.