[CTC] The Impossible Plight of Pro-Tariff Liberals

[Arthur Stamoulis]

https://www.theatlantic.com/economy/archive/2025/05/trump-tariffs-liberals/682697/


THE IMPOSSIBLE PLIGHT OF THE PRO-TARIFF LIBERALS

They finally got the Democratic Party to listen to them. Then came Trump’s
second term.

By Rogé Karma <https://www.theatlantic.com/author/roge-karma/>   May 7,
2025, 7 AM ET

Lori Wallach was into tariffs before they were cool, and she was still into
them when they became uncool again. She cut her teeth fighting alongside
labor unions and environmental groups against NAFTA in the 1990s. For more
than 30 years, she has been trying to convince Democrats to be more
skeptical of free trade. She spent most of that time in the political
wilderness, waging one losing battle after another against a powerful
bipartisan free-trade consensus. Then the winds began to shift. Donald
Trump was elected president after railing against free-trade agreements.
Congressional Democrats helped defeat Barack Obama’s signature trade deal,
the Trans-Pacific Partnership (TPP). The Biden administration embraced such
taboo ideas as industrial policy and targeted tariffs, with near-universal
support from fellow Democrats. The moment that Wallach had been working for
her entire career seemed to have finally arrived.



And now she’s watching in horror as Trump sets it all on fire.

Since taking office, Trump has imposed tariffs on Mexico and Canada. He has
announced—and then, confusingly, paused—massive “reciprocal” tariffs on the
entire world. He has started a full-blown trade war with China and
suggested that Americans will simply have to make do with having fewer,
more expensive products on store shelves. In the process, he has infuriated
America’s allies, paralyzed businesses, sent the stock market reeling, and
nearly precipitated a bond-market meltdown. Economists now warn that the
economy is headed for 1970s-style stagflation. To ask Wallach where she
disagrees with the Trump approach to tariffs is to sign yourself up for a
movie-length diatribe. “The last few months have been a master class on how
to screw up tariffs,” she told me. “It’s hard to describe just how
frustrating it is to watch Trump take what can be a very effective policy
tool and completely undermine it.”

Wallach is not the only liberal trade hawk having a hard time right now. In
recent weeks, I’ve spoken with about a dozen politicians, former White
House officials, activists, and intellectuals who have helped push
Democrats to become more skeptical of free trade. Like Wallach, they fear
that the president’s ill-conceived approach to tariffs will discredit the
tool entirely in the eyes of voters. Democratic politicians will respond by
reembracing free trade. Decades of painstaking progress to build a new
trade consensus will be wiped away in a few months. “Trump’s recklessness
is playing right into the hands of corporate America,” Sherrod Brown, the
former Democratic senator from Ohio, who has long fought for greater trade
restrictions, told me. “It has given them an opening to say, ‘Look how
terrible tariffs are—we should go back to the old free-trade consensus.’”

These pro-tariff liberals are trying to thread an excruciatingly narrow
political needle. They must convince their side that, as bad as Trump’s
approach has been, tariffs are still a valuable policy tool when applied
rationally to specific countries and sectors. They must do this at a moment
when the Democratic base wants nothing more than for its leaders to bring
the fight to the current president—a president whose biggest political
weakness happens to be tariffs. If they fail, then the decades-long project
of building a new trade consensus could turn out to have all been for
nothing.

Throughout the 1990s and 2000s, Democrats and Republicans found common
ground in their enthusiasm for free trade. NAFTA and the decision to allow
China into the World Trade Organization passed with bipartisan support.
Plenty of lawmakers, especially Democrats, did object to these deals at the
time. But the notion that more free trade was better was so widely held
across the two parties that it became part of what was known as the
“Washington Consensus.”

For much of his life, Jake Sullivan believed in that consensus. His
background reads like the fictionalized archetype of a globalist elite:
educated at Yale, then Oxford, then Yale again for law school; winner of
the Marshall Scholarship, which he turned down in favor of the Rhodes;
intern at the Council on Foreign Relations. As a national security adviser
in the Obama administration, he supported the TPP.

The 2016 election shook his faith. Trump ascended to the presidency in part
by attacking America’s leaders for shipping jobs overseas and by promising
to rip up free-trade agreements. (Indeed, after seeing Trump and Bernie
Sanders tap into voters’ resentment toward trade, Sullivan, who at the time
served as the top foreign-policy adviser to the Hillary Clinton campaign,
encouraged his boss’s decision to denounce the TPP.) The same year, a trio
of economists published a landmark paper
<https://www.nber.org/papers/w21906> showing that free trade with China had
cost about 2 million U.S. workers their jobs and devastated much of the
Rust Belt, a phenomenon that became known
<https://www.theatlantic.com/economy/archive/2025/04/trump-china-shock-manufacturing/682631/>
as
“the China shock.” Later
<https://www.washingtonpost.com/news/monkey-cage/wp/2016/12/02/trump-won-where-import-shocks-from-china-and-mexico-were-strongest/>
 research
<https://slate.com/business/2016/12/study-suggests-job-losses-to-china-helped-donald-trump-win-the-election.html>
found
that Trump had overperformed in counties that had been most heavily exposed
to Chinese imports. The lesson was that although free trade brings
widespread benefits, it also can inflict extremely concentrated costs—with
potentially disastrous political ramifications.

Now out of government, Sullivan found himself searching for where his party
had gone wrong. He met with manufacturing workers and labor-union officials
who described the toll that shuttered factories and lost livelihoods had
taken on the American middle class. He watched as China veered in an ever
more authoritarian and aggressive direction even as it became more
integrated into the global economy—the exact opposite of what free-traders
had predicted. He sat at home during the early days of the coronavirus
pandemic as the United States found itself facing shortages of supplies as
basic as face masks and as essential as semiconductors. Eventually, he
concluded that the old consensus was deeply flawed. “There were a number of
these moments where it became clear that the world had changed,” Sullivan
told me. “But our prescriptions for what to do about it had not been
updated to account for the world we were now living in.”

Joe Biden, a longtime free-trade advocate, had undergone a similar
awakening by the time he took office, in 2021. He appointed Sullivan as his
national security adviser and tasked him with weaving the administration’s
trade policy, domestic economic priorities, and foreign-policy agenda into
a cohesive vision. In April 2023, Sullivan gave a speech
<https://bidenwhitehouse.archives.gov/briefing-room/speeches-remarks/2023/04/27/remarks-by-national-security-advisor-jake-sullivan-on-renewing-american-economic-leadership-at-the-brookings-institution/>
outlining
the contours of that vision, which he called a “new Washington consensus.”
“The postulate that deep trade liberalization would help America export
goods, not jobs and capacity, was a promise made but not kept,” Sullivan
declared. Instead of deferring to the whims of the global free market, the
U.S. government should play a more active role in creating good
middle-class jobs, reducing economic dependence on geopolitical
adversaries, seeding new industries crucial to national security, and
building resilient supply chains. The centerpiece of the new consensus was
the passage of major public investments in clean energy and semiconductor
manufacturing.

For Wallach, now the director of Rethink Trade at the American Economic
Liberties Project, the Sullivan speech was the ultimate validation.
Finally, a Democratic administration was saying and doing the kinds of
things she had spent decades advocating. But the administration remained
internally divided over the use of outright protectionist measures;
free-traders such as then–Treasury Secretary Janet Yellen frequently clashed
<https://www.reuters.com/world/us/exclusive-us-treasurys-yellen-trade-czar-tai-odds-over-china-tariffs-2022-05-17/>
with
trade skeptics such as U.S. Trade Representative Katherine Tai. Biden
quietly kept in place most of the tariffs that Trump had levied on China,
but he began the final year of his first term without having added any new
ones.

What changed the administration’s calculus was the looming prospect of a
second China shock, this time in the very industries the administration was
working so hard to build up. By 2024, after decades of strategic state
subsidies, China was producing
<https://www.foreignaffairs.com/china/underestimating-china> two-thirds of
the world’s electric vehicles, three-quarters of the world’s electric
batteries, and 90 percent of the world’s solar panels, and selling them for
much cheaper than the corresponding American products.

To the administration, the danger was clear. Without intervention, the
American auto industry, which had only just begun its own transition to
EVs, could be wiped out by cheaper Chinese imports. Other clean-energy
industries would be crushed before they had time to benefit from the
government’s huge investments. The U.S. would become dependent on its
biggest rival for some of the most important technologies in the world.
Future demagogues would seize on the issue to win elections.

This nightmare scenario converted even longtime free-traders into tariff
supporters. In March 2024, Yellen made
<https://home.treasury.gov/news/press-releases/jy2214> a visit to the
factory floor of Suniva, a Georgia-based firm that had been developing a
cutting-edge process for manufacturing solar panels, only to file for
bankruptcy in 2017 after Chinese panels began flooding the U.S. market.
Biden’s clean-energy investments had helped the company reopen, but it was
still years away from reaching the scale needed to compete with Chinese
firms. “This was true across almost every clean-energy sector,” Yellen told
me. “We felt we needed to be competitive in producing the energy sources of
the future. But without protection, our companies would have stood no
chance.”

Last May, the Biden administration announced
<https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet-president-biden-takes-action-protect-american-workers-and>
tariffs
on a handful of Chinese goods in “strategic sectors,” including 25 to 50
percent tariffs on batteries, solar panels, medical supplies,
semiconductors, and certain steel and aluminum products, and 100 percent
tariffs on electric vehicles. The restrictions represented what is
sometimes called a “targeted tariffs” approach, rooted in the belief that a
select few industries are important enough to be protected from foreign
competition, even at the cost of higher prices. If China were allowed to
totally dominate solar panels, semiconductors, and cars, then the U.S.
would end up reliant on a geopolitical adversary for its energy, military,
and transportation infrastructure. And if the government stood by while
industry after industry experienced a second China shock, the economic and
political consequences would be severe.

Supporters of the targeted approach recognized that tariffs are a blunt
tool that must be used sparingly, in combination with other strategies to
bolster American industry. “What the Biden team understood is you can’t
*just* do tariffs,” Wallach told me. “You need investment to build capacity
in a home. You need to incentivize factory building. You need to work with
allies to diversify sources of goods. It’s a whole package.”

The Biden tariffs, limited though they were, really did signal the
emergence of a new consensus in Washington. Congressional Democrats were
almost universally supportive, while Republicans were largely silent. A
move that would recently have been considered beyond the pale had become
conventional wisdom.

Heading into the 2024 election, several
<https://www.reuters.com/world/us/us-voters-narrowly-support-trumps-tariff-pitch-reutersipsos-poll-finds-2024-09-15/>
 polls
<https://www.nytimes.com/interactive/2024/09/28/us/elections/times-siena-rust-belt-crosstabs.html>
found
that majorities of voters supported tariffs. Today, after months of
tariff-related economic chaos, nearly
<https://news.gallup.com/poll/660002/americans-skeptical-benefits-tariffs.aspx>
 every <https://poll.qu.edu/poll-release?releaseid=3922> credible
<https://www.washingtonpost.com/business/2025/04/25/trump-tariffs-poll-approval/>
 survey <https://www.cnn.com/2025/04/28/politics/poll-trump-economy-tariffs>
finds
the opposite. Support for free trade, meanwhile, has never been higher. In
Gallup’s most recent survey
<https://x.com/Gallup/status/1907474617499005433>, 81 percent of Americans
said that they view international trade as an “opportunity” as opposed to a
“threat”—a 20-point jump from just a year prior and the highest percentage
since Gallup started asking the question, in the early 1990s. To
free-market economists, Trump has proved what they have known all along:
Trade restrictionism is always a bad idea.

This argument drives pro-tariff liberals crazy. To them, the notion that
Trump’s policies would discredit tariffs in general is the equivalent of
saying that the existence of fentanyl overdoses discredits taking Advil for
a headache. Biden focused on a narrow set of goods from a single country;
Trump has tariffed almost all goods from almost all countries. Biden’s
tariffs were one piece of a broader industrial strategy that included
massive public investments; Trump has no plans for new investments and has
threatened to repeal the ones that Biden passed. Biden implemented tariffs
carefully and gradually; Trump jacked up tariffs on China by 125 percentage
points in one day, and has since modified his tariff policies too many
times to count. Biden supplemented tariffs by deepening
<https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2023)754617>
trade <https://www.commerce.gov/ipef> relations with allies; Trump has
threatened to tariff America’s allies into submission. Biden’s tariffs
provoked little to no retaliation from China and hardly registered in the
stock market; Trump’s tariffs have triggered a full-blown trade war. “It’s
strange to even consider these the same kind of policy,” Sullivan told me.
“It’s like comparing a scalpel to a sledgehammer. They are totally
different tools.”

Several Democrats have responded
<https://www.nytimes.com/2025/04/13/us/politics/democrats-trump-tariffs-policy.html>
to
Trump’s tariffs with a version of this argument. These include not just
Rust Belt politicians (such as Representative Chris Deluzio of
Pennsylvania, who attacked
<https://x.com/HouseDemocrats/status/1908218153404117109> Trump’s
restrictions for being “chaotic” and “inconsistent” while acknowledging
that tariffs remain a “powerful tool”) and outspoken progressive populists
(such as Bernie Sanders
<https://vermontbiz.com/news/2025/april/04/sanders-statement-trumps-escalating-trade-war-world>
and
Elizabeth Warren) but also the party’s leaders. “Tariffs, when properly
utilized, have a role to play in trying to make sure that you have a
competitive environment for our workers and our businesses,” House Minority
Leader Hakeem Jeffries said
<https://www.nytimes.com/2025/04/13/us/politics/democrats-trump-tariffs-policy.html>
in
a recent interview.

To Wallach, statements like these capture just how much progress Democrats
have made on trade policy. To other observers, however, they’re political
lunacy. Democrats’ attempts at nuance on tariffs have been widely mocked as
an example of their inability to capitalize on Trump’s mistakes. “As the
American public was screaming, ‘Please, God, no!’ the Democrats were calmly
whispering, ‘Yes, but,’” my colleague Jonathan Chait witheringly wrote.
<https://www.theatlantic.com/ideas/archive/2025/04/trump-tariff-democrats-trade/682333/>
Or,
as *The New Republic*’s Jason Linkins put
<https://newrepublic.com/post/193888/gretchen-whitmer-trump-tariff-trap> it,
“The dumbest thing Democrats could do right now is lend even a scintilla of
credence to a bad president’s worst idea.”

In the eyes of pro-tariff liberals, however, something bigger is at stake
than political-messaging tactics. They see the old free-trade establishment
using the cover of Trump’s unpopular program to regain the territory they
lost over the past decade. Free-market economists who oppose all trade
restrictions have become fixtures on cable television. And some
high-profile Democrats have started taking public stances that appear to be
ripped from an Econ 101 textbook. “Tariffs are bad outright because they
lead to higher prices and destroy American manufacturing,” Colorado
Governor Jared Polis recently declared
<https://x.com/jaredpolis/status/1909991321588113716> on X. “Trade is
inherently good because both parties emerge better off from a consensual
transaction.”

The pro-tariff liberals are afraid of where the debate is headed. “We can’t
fall into this trap of thinking it’s either the Trump way or the *Wall
Street Journal*–editorial-board way,” Sherrod Brown told me. “Neither of
those options is good for American workers.”

Now Wallach is fighting to salvage her life’s work. She has spent the past
few months writing op-ed
<https://prospect.org/economy/2025-03-28-trade-policy-we-need/> after op-ed
<https://www.project-syndicate.org/commentary/democrats-misguided-criticism-of-trump-tariffs-by-lori-wallach-2025-03>
, memo
<https://rethinktrade.org/wp-content/uploads/2025/03/RethinkTrade_ReciprocalTariffs_Final.pdf>
after
memo, lengthy X post
<https://x.com/WallachLori/status/1910354100832657624> after
X post, practically begging her fellow liberals not to give up on tariffs
just because Trump has given them a bad name. She has poured countless
hours into meeting with members of Congress, union leaders, and
environmental groups in an effort to build a durable liberal pro-tariff
coalition.

But if Wallach and her allies are pushing against the side of an aircraft
carrier, trying to nudge it in their preferred direction, Trump is holding
the steering wheel. According to the monthly Conference Board survey,
consumer confidence recently fell
<https://www.cnbc.com/2025/04/29/consumer-outlook-hits-lowest-since-2011-as-tariff-fears-mount-conference-board-survey-shows.html>
to
its lowest point since April 2020, while expectations for the next six
months fell to its lowest point since October 2011. That’s despite the fact
that the brunt of the economic pain from Trump’s tariffs hasn’t even been
<https://www.washingtonpost.com/opinions/2025/04/30/trump-tariffs-china-container-ships-shortages-price-increases/>
 felt
<https://www.bloomberg.com/opinion/articles/2025-05-01/us-economic-weakness-is-being-exaggerated-for-now?re_source=postr_story_2>
yet.
If this goes on, attempts to distinguish between good and bad tariffs might
sound about as convincing as attempts to distinguish between good and bad
bedbug infestations.

Still, Wallach remains stubbornly confident that her side will prevail. “I
ultimately don’t think we’re going back to the old trade consensus,” she
said. “Democrats saw what 40 years of free trade brought us. And under
Biden, they saw that a different kind of approach can work. I really do
believe that will be enough.”
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