The debate over tariffs is not a new one. It precedes, and lies in the background of the American Civil War. The British Empire’s policy of mercantilism was a key factor in the lead-up to the American Revolution.
It should therefore be no surprise to learn that tariffs, free trade, protectionism, import quotas, etc….that whole ball of wax…was the subject of debate during the 1980s, too.
At that time, the specific source of concern was the Japanese automotive industry, which was making strong inroads into the American market. American cars, meanwhile, sold poorly in Japan.
There were various reasons for the imbalance. In the 1970s and 1980s, Detroit-made automobiles were plagued by numerous quality problems. (The joke was that you didn’t want to buy a UAW-made car that rolled off the assembly line on a Monday or a Friday.)
Japanese cars, meanwhile, were comparatively cheap, high-quality, and fuel-efficient. The oil crisis eased somewhat during the 1980s, but Americans still had an appetite for vehicles that could go far on a single gallon of gas (which then cost around a dollar).
In those days, it was the Democrats who made the case for tariffs, import quotas, and protectionism. President Reagan and the Republicans resisted. The above video is President Reagan’s April 25, 1987 radio address on that very subject.
The differences between Ronald Reagan and Donald Trump are too many to enumerate here. But it’s safe to say that Ronald Reagan would have disagreed with President Trump’s recently unveiled tariff policy.
There is more than one side to the tariff issue, of course. I’ve made the case against tariffs on this blog, based on what I learned as an economics major many years ago. I also raised an important counterpoint: that globalization has exacerbated the widening inequalities between the working class and the managerial class here in the USA.
This debate will continue over the coming weeks and months, as the results of President Trump’s tariff policies become apparent. Trump’s plan may work; but the preponderance of historical and economic data suggests otherwise.
One thing is clear, though: neither the Democrats nor the Republicans represent what they did in the 1980s. For evidence, one need look no further than the current tariff debate.
-ET