America Can’t Tariff Its Way Back to Greatness

President Donald Trump’s return to the White House has brought a renewed commitment to protectionism. Central to his vision is a sweeping tariff regime—broad based and punitive—framed as the backbone of national economic revival. Trump presents these tariffs as a means to resuscitate American manufacturing, reduce the trade deficit, and reclaim national sovereignty. But this is not simply a replay of the 2018 trade wars; it represents a maximalist attempt to position tariffs as the cornerstone of U.S. industrial policy. While the approach is designed to project strength and leadership, this tariff-first vision risks weakening U.S. competitiveness, destabilizing supply chains, and alienating key allies—ultimately undermining the economic statecraft and global leadership it seeks to reinforce.

Tariffs have long played a role in American economic policy. When applied selectively, they can help shield infant industries, counter unfair trade practices, or support sectors critical to national security. However, making them the primary instrument of industrial renewal overlooks both historical precedent and the structural realities of the modern global economy. From Alexander Hamilton’s Report on Manufactures in 1791, to Cold War-era technological leaps, American industrial strength has historically stemmed from a diversified policy toolkit. Technological advances such as the Internet and GPS emerged from government-supported innovation ecosystems—through research and development (R&D) funding, public procurement, and strategic coordination—not through isolationist trade measures.

As I argue in The Oxford Handbook of Geoeconomics and Economic Statecraft, effective industrial policy requires a balance of defensive and offensive instruments. Defensive tools like tariffs and export controls can address market distortions or protect critical industries. Yet long-term industrial leadership also depends on offensive strategies: targeted subsidies, sustained R&D investment, and mission-oriented public-private initiatives that cultivate national champions and mobilize private capital. Successful industrial policy also requires a coordinated mix of regulatory frameworks with incentives—so-called “carrots and sticks”—to mobilize private investment. A narrow focus on trade protection, without the corresponding emphasis on capacity building and innovation, is unlikely to deliver durable gains in productivity or global market share.

Moreover, prioritizing goods trade overlooks the actual foundations of U.S. economic strength in the 21st century. While manufacturing remains important, today, America’s global competitiveness is rooted in high-value services, intellectual property, and disruptive innovation. For instance, Boeing earns more revenue from maintaining aircraft than from building them, and Apple’s strength lies not only in its devices but in its software and platform ecosystem. U.S. leadership in areas like artificial intelligence, biotechnology, and cloud computing depends on cross-border data flows, integrated supply chains, and access to international talent. Broad tariffs jeopardize these pillars by raising input costs for domestic producers, complicating logistics, limiting talent mobility, and triggering retaliatory measures that reduce U.S. market access abroad.

The lack of distinction between allies and adversaries in Trump’s tariff regime also carries significant geopolitical implications. Strategic competition with China requires not just domestic investment but also close coordination with allied democracies. Export controls and investment screening—key components of U.S. geoeconomic strategy—are effective only when coordinated multilaterally. Japan, South Korea, Taiwan, and the Netherlands are essential to U.S. efforts to reshore advanced production and secure key technologies, especially in semiconductors. For the Stargate Project that Trump touted, the involvement of foreign partners such as SoftBank underscores the importance of global collaboration. Unilateral tariffs on these strategic partners risk undermining trust, damaging cooperation, and encouraging them to pursue alternative trade and investment arrangements that dilute U.S. influence in shaping global economic rules.

Beyond economics and geopolitics, the unpredictability of a tariff-heavy regime weakens U.S. institutional credibility. Industrial policy is most effective when grounded in a stable regulatory environment that provides clear signals for long-term investment and planning—particularly in sectors with complex supply chains and extended investment cycles. Frequent policy reversals and abrupt tariff announcements send conflicting signals to investors, diminish business confidence, and damage institutional credibility. The U.S.-China trade war in 2018 prompted many firms to reroute supply chains to Vietnam—only for that country to face renewed tariff threats under Trump’s second-term agenda. Such volatility disrupts global investment patterns and pushes firms to hedge against U.S. exposure, weakening America’s long-term strategic position.

There is, to be sure, broad consensus on the need to rebuild America’s industrial base—for reasons of national security, economic resilience, and strategic autonomy. Tariffs may be politically expedient and administratively simple. However, as scholars like Mariana Mazzucato have emphasized, a robust industrial policy requires regulatory coherence, long-term value creation, strengthened institutional capacity, and updated evaluation tools that reflect system-wide and dynamic impacts—rather than focusing on short-term gains. Tariffs may have a role within a comprehensive industrial strategy, but when disconnected from a coherent long-term vision, they risk becoming a self-defeating instrument. The future of U.S. economic leadership will rest on building strategic capabilities through sustained investment, innovation, and international collaboration—not by retreating behind tariff walls. America cannot tariff its way back to greatness.

Seung-Youn Oh is an associate professor in the department of political science at Bryn Mawr College. She is the author of “Revitalized Tools for Economic Statecraft: Vertical Industrial Policy in the Context of Global Power Competition” in The Oxford Handbook of Geoeconomics and Economic Statecraft.

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