Six protectionists walk into a bar...

How different factions on the Right are thinking about tariffs in 2025.

Photo by Paul Teysen on Unsplash

President Trump’s showdown with Mexico and Canada this week was shaping up to be an early test of just how far he has shifted the Right’s views on trade policy over the last decade. The last-minute decision to delay the proposed 25 percent tariffs instead put off this fight for another day. The loose coalition of trade policy heretics, who arrive at support or sympathy for tariffs for a diverse range of reasons, will hold together for now.

But as the president and his team develop a trade policy agenda for the rest of his term, fissures in this coalition are likely to grow over time. Trump will ultimately pick one general course — are tariffs a temporary negotiating tool or a permanent revenue-raiser? — leaving some factions victorious and others unsatisfied.

These divides are fascinating. While the Right has become broadly more supportive of protectionism over the last decade, the range of thought within this coalition remains wide. On Saturday, I sketched out what I view as the six main pro-tariff camps. I elaborate on them below.

The Reciprocity Camp: Tariffs can be leveraged to help us achieve freer trade.

The first camp’s motives can be summed up in one word: reciprocity. The United States has signed 14 free trade agreements with 20 countries and is a member of the World Trade Organization. No major, rich economies have double-digit effective tariff rates; the holdouts with average tariff rates above ten percent are almost exclusively poor African countries.

Nevertheless, the U.S. does have longstanding, industry-specific trade disputes with many friendly countries. Famously, the European Union puts a ten percent tariff on cars imported from the United States, which in turn applies only a 2.5 percent tariff to European cars. But these days, with average tariff rates so low, it’s arguably non-tariff barriers to trade where the real action lies. The U.S. has long sought to push Canada to take a more free-market approach to its lumber and dairy industries, for example, arguing that Ottawa’s backing undercuts American competitors. In theory, tariff threats could yield concessions on these issues.

A traditional free trader like Milton Friedman would argue for unilateral tariff abolition regardless of what other countries do. Another country wants to make its citizens and businesses pay more for imported goods? That’s their problem, not ours. Yet this line of thinking has not caught on, either in the U.S. or abroad. Domestic firms want their government to fight for their ability to export abroad. The Reciprocity Camp wants us to get back to playing hardball in defending their interests, and free trade in general.

The Negotiator Camp: Tariffs can extract other, non-trade concessions in areas like migration or drugs.

This camp likely feels vindicated after this week, as President Trump’s tariff threats against Mexico and Canada extracted promises from the leaders of both countries to send more resources to their respective borders with the United States. Last week, a threat of tariffs on Colombian imports pushed its president to back off a demand to stop returning deportees to the country on military aircraft.

Like the Reciprocity Camp, the Negotiators see no problem using the threat of tariffs to get what they want. But they want to go further, using the threat of tariffs to achieve goals unrelated to traditional trade policy, like drug trafficking, migration, or human rights.

Both of these camps’ support for tariffs is merely tactical, and neither may be comfortable with a more permanent protectionist regime.

The Friendshoring Camp: Tariff are a tool to shift supply chains to allied countries, with whom we should integrate further.

Further down the protectionist spectrum are the “De-riskers” and “Decouplers,” both of whom see tariffs as a tool for extricating ourselves from the Chinese economy. The former group wants heavy tariffs on China to nudge strategic supply chains toward allied countries, remaining indifferent as to whether China continues to manufacture our apparel or furniture. The latter group wants broader tariffs on China to separate our economies entirely.

The Friendshoring Camp doesn’t think we are ever going to produce all the electric vehicles consumed by American consumers. They would accept an outcome in which the U.S. reshores some EV production but sources much more from South Korea or Japan.

This group does not support universal tariffs, just tariffs on imports from adversarial countries. In fact, many want deeper integration with friends like Canada or the European Union. A prolonged trade war with fellow democracies could alienate this camp.

The Builder Camp: Tariffs may make Americans marginally poorer. But they will help us reshore manufacturing, a national security imperative.

Many hard-nosed national security hawks convinced a hot conflict with China is imminent may fall into this camp. America’s defense industrial base is ill-prepared for a potential war over Taiwan. CSIS estimates that U.S. forces would run out of some key ammunition within a week. China’s shipbuilding capacity dwarfs that of the United States by a factor of more than 200. An inability to quickly ramp up defense manufacturing in the event of a war could have devastating consequences.

The Builder Camp may acknowledge that tariffs will impost costs on Americans, including businesses. But they argue that this is a necessary step to reshore sectors that simply cannot be left to foreign countries. Whether tariffs are likely to accomplish this goal in practice is an exercise I’ll leave up to the reader.

The McKinley Camp: Tariffs were the secret to 19th century American prosperity and would do the same today. Impose them permanently.

From writers like Michael Lind to groups like the Coalition for a Prosperous America (CPA), the McKinley Camp offers an alternative history of why the United States got rich in the first place, putting tariffs at the center of the story. Nineteenth-century America indeed had far higher tariffs than we do today, though average rates did steadily decline between the end of the Civil War and the outbreak of World War I.

As opposed to the Builder Camp, which concedes that tariffs have both costs and potential benefits, the McKinley Camp views tariffs as much closer to a free lunch. CPA, in particular, is adamant that tariffs will increase not just U.S. manufacturing output, but productivity. Its modeling team asserts that an across-the-board 10 percent tariff would increase inflation-adjusted incomes by 5.7 percent. The empirical assumptions within CPA’s model have come under heavy criticism.

The Depreciation Camp: The U.S. dollar’s status as the world’s reserve currency is the fundamental issue. Tariffs can disrupt or ameliorate the problems with this system.

The final camp accepts mainstream economists’ view that it is the U.S. dollar’s place at the center of the global financial system that drives our persistent trade deficits, not tariff policy.

My friend

Samuel Hammond

likens the dollar’s role to a “resource curse.” Demand for American financial assets drives up the value of the currency, making our exports uncompetitive and incentivizing “financialization at the expense of investment in the real economy.” These points have also been fleshed out in Michael Pettis and Matthew C. Klein’s, Trade Wars Are Class Wars, whose framework has earned devotees on both the Left and Right.

Before the pending tariffs on Canada and Mexico were scrapped, Sam suggested they could be the opening gambit in a campaign to de-dollarize the global financial system. Trump’s incoming CEA Chair Stephen Miran wrote a notable paper in November floating the idea of a “Mar-a-Lago Accord” to weaken the Dollar. While Trump appears to be using tariffs to negotiate on other issues for now, I would not be surprised if this final camp proves ascendant at some point over the next few years.

---

Ultimately, this is still Trump we are talking about, so we may end up with some unpredictable synthesis of the above camps, or a new strategy entirely. Regardless, this typology should provide a useful way of thinking about how different factions within the Right are approaching trade policy, and how they might react as Trump’s tariffs agenda comes together this year.