Striking a balance with tariffs to protect U.S. interests

By Jeff Mayhugh
Real Clear Wire

President Trump recently instituted new tariffs on two allies and one adversary: 25% on goods from Mexico and Canada and 10% on China. Many are concerned that the tariffs will raise prices for U.S. consumers still reeling from the inflation of the Biden years. Others are concerned that starting a trade war with our adversaries will lead to other escalations and unnecessary pain.

The Trump tariffs are designed to stem the flow of fentanyl from China to Canada and Mexico and into the United States. They “contain clauses suspending a duty-free exemption for low-value shipments below $800 that is widely seen as a loophole that has allowed shipments of fentanyl and its precursor chemicals into the United States.”

If our allies are allowing our adversaries to funnel drugs into our country, why shouldn’t we do something to stop them? Doesn’t the president have an obligation to act and protect American interests?

Trump says there might be “some pain” from the tariffs, which has Americans, already suffering from rising grocery and energy costs, concerned. Trump is tough at talking the talk, but the American people must walk the walk.

A tariff is a negative incentive to trade, and people and nations tend to respond better to positive incentives. Striking the right balance is key to providing preferable results for citizens trying to keep their families safe and pay their bills. The Trump tariffs are already providing headline wins, with both Mexico and Canada coming to the table to fight drug trafficking. Mexico has agreed to send 10,000 troops to the border to stop drug trafficking, leading to a pause in the tariffs for 30 days. China, on the other hand, is going tit for tat with new tariffs.

Using tariffs as a tool to protect American interests is nothing new. In 1807, the British were one of America’s most prominent partners and adversaries. The British and French were in the midst of the Napoleonic Wars, and the United States preferred to stay neutral. However, America was stuck in the middle when both nations began impressing American sailors.

As a result, Secretary of State James Madison and President Thomas Jefferson crafted the Embargo Act of 1807, which Congress passed. Madison and Jefferson sought a non-violent method to assert American independence and protect American interests. The embargo halted all trade with all European nations. The idea was to harm their economies and force them to change their policies towards the U.S.

The Act largely failed, hurting the U.S. economy more it hurt the British, particularly in the northern states that relied heavily on trade. The continued escalation of events between the British and Americans ultimately led to the War of 1812 and the burning of Washington. The war ended in 1814 with the signing of the Treaty of Ghent; by then, the Napoleonic wars were over, and the British had no need for impressment. America endured more pain than planned but reasserted its independence.

After the harsh Embargo Act failed, it was replaced with the Non-intercourse Act (1809) and Macon’s Bill No.2 (1810). The Non-intercourse Act lifted trade restrictions with all European nations except Britain and France. Macon’s Bill provided a positive incentive: If Britain or France lifted the impressment of sailors, the U.S. would lift trade restrictions. France agreed, and trade relations between the countries were restored, easing the pain in the North.

Since the founding era, trade and tariffs have been used as a tool to defend Americans’ interests and establish our independence in global markets. They have provided both positive and negative results.

Madison signed the first protective tariff in American history. The Tariff of 1816 placed a tax on imported goods, protecting American industries in textiles, iron, and other manufacturing. In the short term, the tariff provided a boom to the economy, particularly in the North; in the long term, it led to sectional tensions as protective tariffs escalated. The Tariff of 1828 lifted tariff rates from 20-25% up to 50%, leading to the Nullification Crisis of 1832.

The McKinley tariffs Trump admires cost the Republicans the House in the 1890 elections and inadvertently contributed to the Spanish-American War. However, McKinley’s tariffs also included positive incentives, such as a Reciprocity Clause that reduced tariffs on countries that agreed to lower their tariffs on American goods. The idea was to create strategic partnerships that were mutually beneficial – fostering competition and cooperation and encouraging other nations to open their markets to American products in exchange for more favorable terms on American imports.

While tariffs can be a peaceful and effective tool in global disputes, they can provide unintended and violent consequences such as war if wielded with too heavy a hand. Striking the right balance is key to maintaining strong partnerships while protecting American interests. As the U.S. and Mexico negotiate, it’s essential that both nations show respect for the other’s interests, finding common ground for a deal and avoiding pain on both sides.

Jeff Mayhugh is founding editor of Politics and Parenting and vice president at No Cap Fund. Follow him on X @jmayhugh28

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