American tariffs and the return to 'fair trade'
Prof. Glenn Diesen / op-ed in CGTN
US President Trump has referred frequently to "fair trade" instead of "free trade", and tariffs have become his preferred economic instrument to elevate the US in the international economy. What is the economic history behind these ideas and are they likely to succeed?
The economic dominance of Britain in the early 19th century created an aversion to free trade in the US, often derided as "free trade imperialism". The infant industries of the US (high cost, low quality) could not compete against the mature industries of the UK (low cost, high quality) under a free market. The UK could saturate the US market, thus limiting its industrial development, and even challenging the country's political sovereignty. The solution was the "American System", which involved using temporary subsidies and tariffs to defend and develop domestic industries until they matured and could compete in international markets.
The US switched from fair trade to free trade when it industrialized and became the most competitive economy in the world. Starting in the late 1980s, Washington augmented a US-centric approach to globalization by promoting an international division of labour in which the US would saturate global markets with technology, finance, and the high-end of global value chains. Countries such as China would be responsible for the manufacturing, assembly and the low-end of global value chains. However, China industrialized and incrementally climbed up the global value chain in what has been hailed by many as the most spectacular development in modern human history. As America rapidly lost its manufacturing bases and could no longer monopolize the high-end of global value chains, the US empire as it was known by some no longer exists.
The US simply cannot be the victor in a war of economics with China, and free trade is not seen as a winning strategy. The US has thus returned to "fair trade", where tariffs have once more been weaponized to defend national industries from more mature competitors, primarily from China. Tariffs and the threat of tariffs are also used to renegotiate trade agreements. US-centric globalization is over, supply chains are repatriated, and economic nationalism is back. But will the US be successful?
Technologies and markets have become more complex over the past two centuries. Excessive tariffs create uncertainties, disrupt supply chains and create inflation, and they should be complemented with industrial development to ensure they are temporary. Predictability is important in economics and the random threats of huge tariffs disincentivize investments as there are too many uncertainties. The manufacturing process consists of complex supply chains and the tariffs on imported components make the final product less competitive and have an overall inflationary impact on society as costs are always passed down to the final consumer.
The repatriation of supply chains will take decades. To ensure tariffs are temporary, there needs to be economic activity to enhance maturity and competitiveness – such as technological development, vigorous industrial policies and infrastructure investments. This has not been done in the US as the financialization of the economy and the oligarchy have created excessive rent-seeking. The economic war against China has made matters worse, as banning the export of advanced semiconductors has resulted in the loss of huge market shares, diminishing available funds for research and development. Lastly, the excessive use of tariffs breaks the multilateral rules agreed upon by the World Trade Organization, and other countries will retaliate.
Temporary and moderate tariffs can be a reasonable instrument to enhance competitiveness, yet they come with significant risks. The US insistence on dominating and preventing the rise of China, rather than accepting a new international division of labour between equal great powers, has resulted in the tariff instrument being used too aggressively and thus, making the US destined to fail.
I initially published the following article in CGTN:
https://news.cgtn.com/news/2025-04-03/American-tariffs-and-the-return-to-fair-trade--1CgKusGOZ44/p.html?fbclid=IwY2xjawJcOMhleHRuA2FlbQIxMQABHTNmzxW01z1m4_F0NKq4s0gIVh9HdAavlgAeAOXd-xxigyUFknSTr82HNQ_aem_oGZiYyzm1qHn7isrhvSPmg
First of all, one has to pay detailed attention to what fascists are SAYing, because they always project - and so what they are saying helps you understand what they are DOing.
"Fair trade"? "LIberation day"? Ok - yeah right. Pull the other leg now. When have faascists, including the American oligarchy, ever cared about liberating anyone. Their entire agenda is to ENSLAVE.
The fascist playbook is to coopt and reverse language.
Their intention is not to liberate Americans but rather to imprison them.
This is a reindustrialization (for war preparation purposes, not social uplifting) to be paid for TWICE by American masses.
https://www.rand.org/pubs/commentary/2024/07/resourcing-the-ramp-up-nato-and-the-challenge-of-a.html
One, by taxes aka "tarrifs" which are actually not levyed on foreign countries but on....Americans who buy anything from abroad.
And two by battering down the salaries of Americans who will work on domestic production of goods and services. The "DOGE" is casting out hundres of thousands of workers from jobs, so they can be preyed on....at a lower salaries and with less benefits...by American capitalists. And the goverment is beating down workers rights to organize and negotiate decent salaries and benefits.
https://www.npr.org/2025/03/28/nx-s1-5343474/trump-collective-bargaining-unions-federal-employees
So American workers are being ENSLAVED not "liberated". And to fuel a war preparation effort. At ALL costs. That's why they are taking actions that seem counterproductive....if you assume they case about their own people. They dont.
And when I say its a "fascist" program, I included the Dems too. Biden actually begain this with tarrifs and with the "Inflation reduction act" which was a war reindustrialization program not a "green" program. Biden too battered down workers rights.
Note that the EU claims to be putting up tarrifs as "retaliation". Well no they are lying. We can see that it is a lie because at the SAME time EU is imposing at the same time tarrifs on China. For the same reason: reshoring production to prep for an INTENDED war, at all costs, including costs savaging own people and their living standards.
Moreover the SAME cabal of US and EU previously were cackling to China to cut its industrial production capacity, claiming China had "overcapacity".
https://www.cnbc.com/2024/04/09/eus-von-der-leyen-echoes-yellens-calls-for-tough-stance-on-chinese-overcapacity.html
The Europeans are also impoverishing their own people....for war
https://www.wsws.org/en/articles/2025/04/06/tenj-a06.html
https://www.wsws.org/en/articles/2025/04/05/hlck-a05.html
https://www.politico.eu/article/france-russia-defense-welfare-vs-warfare-political-parties-divided/
https://www.msn.com/en-us/politics/government/france-s-war-economy-is-a-prelude-to-cutting-the-welfare-state/ar-AA1ACrMi
See the agenda. See the continuity. READ the actual priorities and outcomes. Ignore the misdirections.
Diesen’s piece focuses on the economic and geopolitical dynamics of tariffs—how they’re being used to protect U.S. industries, counter China’s rise, and reshape global supply chains. He critiques the aggressive use of tariffs, arguing they disrupt markets, inflate costs, and fail without robust industrial policies to back them up. Your observation about energy and resource depletion adds a critical layer he doesn’t address. Tariffs and industrial repatriation don’t just involve economic strategy; they’re deeply tied to the physical realities of production—energy availability, raw material access, and environmental limits.
For example, bringing manufacturing back to the U.S. requires massive energy inputs. China’s dominance in manufacturing isn’t just about cheap labor or mature industries; it’s also about their control over rare earth elements, efficient (albeit coal-heavy) energy systems, and willingness to exploit resources at scale. The U.S., meanwhile, faces higher energy costs, aging infrastructure, and stricter environmental regulations. Repatriating supply chains could spike demand for oil, gas, or renewables at a time when global reserves are either depleting or transitioning unevenly. Diesen mentions the decades-long timeline for this shift but doesn’t connect it to the resource crunch that could slow it down or make it unsustainable.
Natural resource depletion ties in too. Advanced manufacturing—think semiconductors or electric vehicles—relies on finite materials like lithium, cobalt, and copper. China’s grip on these supply chains isn’t just economic; it’s geological and logistical. Tariffs might protect U.S. industries in theory, but if the raw inputs aren’t secured domestically or through stable allies, the strategy falters. Plus, ramping up domestic extraction or recycling could clash with the financialization and rent-seeking Diesen critiques—oligarchs and investors might prefer short-term profits over long-term resource planning.
This point highlights a blind spot: economic nationalism via tariffs assumes the U.S. can rewind the clock to a self-sufficient industrial era, but the energy and resource landscape has changed since the 19th-century "American System." Without addressing these realities—say, through massive investments in green tech, resource innovation, or energy independence—the tariff push could hit a wall. Inflation from tariffs is one thing; inflation from resource scarcity or energy bottlenecks could be worse.