Back to the Future

We’re back in tariff territory, reflecting an old American debate over free trade and protectionism. Liberals have traditionally been more supportive of free trade, while conservatives have increasingly embraced tariffs and protectionist policies. President Donald Trump has made tariffs a central part of his economic agenda.

But the tariff story is not as simple as Republicans versus Democrats, or free trade versus protectionism. It is about jobs, prices, manufacturing, globalization, national security and, increasingly, the limits of presidential power.

In February, the U.S. Supreme Court delivered a major blow to President Trump’s tariff strategy. In a 6-3 decision, the Court ruled that the International Emergency Economic Powers Act, or IEEPA, did not give the president authority to impose tariffs. The case, Learning Resources, Inc. v. Trump, involved the sweeping tariffs Trump had imposed under the 1977 law.

“We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution," Justice Roberts wrote. "Fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs."

Tariffs are taxes on imports—goods coming into a country. Governments can also tax exports, though rarely. Trump tariffs in 2025 cost each U.S. household $1,000.

In the 1950s and 1960s, dramatic improvements in communication and transportation—think container ships—made world trade easier. After World War II, technology enabled cross-border, international economic activity.

Between 1950 and 2024, the inflation-adjusted value of global trade grew by 4,300 percent. The value of imports to the United States grew from 3.9 percent of its gross domestic production to 14 percent.

Political parties with economically liberal positions have generally favored free trade, while nationalist parties have tended to support protectionism. Free trade has contributed to U.S. economic growth and prosperity, but it has also come at a cost. Many former manufacturing centers were hollowed out as companies moved production overseas in search of lower labor costs.

During the 1980s, free trade was widely promoted as a catalyst for economic growth. Even conservative President George W. Bush later framed free trade as a moral good. The United States championed open markets to expand economic opportunity, although it continued to protect certain domestic industries, including steel and automobiles.

Japan and Germany, for example, emerged as formidable competitors in manufacturing, particularly in automobiles, steel, and consumer electronics. Later, developing countries with substantially lower labor costs became major producers of goods such as toys and apparel. American consumers benefited from the lower prices that global competition produced—and consumers generally welcomed those savings.

As manufacturing declined in the United States, and employment went with it as foreign firms could make goods more cheaply, and some U.S. firms moved offshore for low labor costs.

North Carolina is one of 25 states suing the Trump administration over double-digit tariffs on 59 countries and the European Union. N.C. Attorney General Jeff Jackson notes these tariffs on 80 countries will affect nearly all U.S. imports. What’s more, they could cost the average North Carolina family approximately $1,100 per year. Taxes on imports typically lead to higher prices for consumers.

“These tariffs are hurting families, farmers, and business owners,” according to Jackson. “They’re illegal, and they’re making things harder for North Carolinians who are working around the clock to keep the lights on, pay rent, and afford gas.”

Trump is placing tariffs on certain imports, for example, that punish countries’ imports that are made using forced labor. But an article in the July issue of  The Guardian notes, “Americans import lots of stuff made with forced labor: $170 billion’s worth of imported goods are at risk of being tainted at some stage along the supply chain, according to the Global Slavery Index (GSI), from raw materials through to finished products. In 2023, this was the most among the countries in the G20. Then there’s the issue of forced labor at home.

Tariffs serve various purposes. They can protect industries in the country levying them. Think more jobs, higher wages but tariffs also drive up the cost of imports. This cost is passed along to consumers and raise prices. An average household has paid an extra $2,500, so far in 2026.

Maybe Trump believes he can resuscitate American manufacturing. A year ago, Trump placed tariffs on, well, just about everything. But those April 2025 tariffs were illegal and, as economist Paul Krugman writes, “really very stupid from the point of view of any kind of rational economic strategy.”

As noted above, tariffs impose costs, higher prices that consumers pay. When deemed illegal, importers may get refunds—now under way for the original tariffs and eventually, probably for new tariffs. Krugman notes, “But they don’t pass that on to consumers.”

Krugman notes, of the process, “So we have created a machine which rips off consumers when tariffs are imposed, then hands a bunch of money to corporations when the tariffs are ruled illegal.”

Now the country is attempting to move in the opposite direction. In a sense, we are back to the future.

Betty Joyce Nash reported for the Greensboro News & Record and the Hendersonville Times-News before moving to Virginia where she worked as an economics writer for the Federal Reserve Bank of Richmond. She co-edited Lock & Load: Armed Fiction, an anthology of literary short stories that probe Americans' complicated relationship to firearms. (University of New Mexico Press, 2017.)