Trump: 19th Century Trade Policy for 21st Century America | Global Trade Magazine
International Trade
  March 22nd, 2017 | Written by

Trump: 19th Century Trade Policy for 21st Century America

Proposals Would Mean a Giant Step Back for the US

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  • Trump invokes 200 year-old policies as the inspiration for his own protectionism.
  • Trump: US “must protect itself from the outside.”
  • Trump: Tariffs protect American industry and finance American infrastructure.

At a rally in Kentucky on Monday, President Donald Trump reiterated his support for the American System, a program first expounded in the 19th century by Henry Clay. Clay (1777-1852) represented Kentucky in the US Congress and became speaker of the House of Representatives in 1811.

It’s not the first time Trump has invoked 200 year-old policies as the inspiration for his own protectionist programs.

In a rally in Detroit on March 15, Trump said, “Our great presidents, from Washington to Jefferson to Jackson to Lincoln, all understood that a great nation must protect its manufacturing, must protect itself from the outside.”

Trump echoed those sentiments during his speech in Kentucky on Monday. “Henry Clay believed in what he called the American system, and proposed tariffs to protect American industry and finance American infrastructure,” the president said. “Like Henry Clay, we want to put our own people to work.

“Clay was a fierce advocate for American manufacturing,” Trump continued. “He wanted it badly.  He said, very strongly:  Free trade, which would throw wide open our ports to foreign production without duties, while theirs remains closed to us.”

Trump went on to expound on Clay’s philosophy. He explained that Clay advocated for import tariffs as a mechanism to protect US industry.

Trump has described himself as a free trader and fair trader. The program he outlined in Kentucky was as far from free trade as one can imagine. Imposing high tariffs on imports will have the effect of closing off trade, as US trading partners will retaliate with their tariffs on imports from the United States. That would jeopardize the 25 percent of manufacturing jobs that depend on exporting.

Yes, statesmen like Henry Clay and Abraham Lincoln supported high tariffs on imports to support US industry. But that was in the early and mid-19th century. American industry was in its infancy and, arguably, required protection to allow it to grow. Tariffs were also the primary source of revenue for the federal government in the days before the income tax was introduced.

Since the end of World War II, the United States has led the development of a liberal world trade order that has promoted interdependence, competition, and greater global prosperity. Trump’s 19th century trade policy proposals – like his disparagement of decades-old US alliances in Europe and his trashing of the Trans-Pacific Partership– would represent a giant step back for the United States, and the world.


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