Lever Time Trump’s Tariff War Explained
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Feb 12, 2025 
Brad Setser, a senior fellow at the Council on Foreign Relations and trade expert, breaks down Trump’s sweeping tariffs and their historical impact on U.S. trade policy. He highlights how the tariffs aim to tackle border security but may worsen the illegal drug trade. Setser explains the complexities of trade relations with China, Mexico, and Canada, and the adverse effects on American manufacturing and jobs. The conversation reveals the challenges of using tariffs as a foreign policy tool and questions their overall effectiveness in restoring U.S. industries.
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Historical Context of Tariffs
- The American Revolution started as a rebellion against British tariffs on tea.
- This highlights how tariffs have long been a contentious issue in American history.
Post-War Tariff Trends
- Post-World War II, low tariffs fostered alliances and prevented a return to pre-war protectionism.
- Bringing China into this system sparked debate due to its different economic and political systems.
NAFTA vs. China's WTO Entry
- NAFTA's impact on American manufacturing was less severe than the impact of China joining the WTO.
- The real negative shock to American manufacturing came from China's unbalanced trade, not from trade with Mexico.