But the fact that some Americans were hurt by a failure to adjust to foreign competition has become the central grievance of the critics of modern US trade policy and has perhaps overly dominated the debate. This has clouded trade policy discussions with issues better addressed through domestic policy actions, such as workforce development and education policy.

The existence of domestic solutions has not stopped prominent officials, such as President Joe Biden’s National Security Advisor, Jake Sullivan, to question how trade fits into US international economic policy and ask “what problems is it seeking to solve?”

Instead of seeing trade openness as a source of strength, it is now framed as a source of potential weakness. Interdependence is increasingly described as a vulnerability, as countries can weaponize their trade links. However, few ever claimed that trade integration would lead to world peace—in fact, economic coercion is part and parcel of international affairs.

What matters, however, are the boundaries countries draw around what kind of behavior is acceptable and what is not. In the international trading system, the drawing of such lines used to take place at the World Trade Organization, but that institution has been weakened by the United States through its continued objections to the WTO’s appeals mechanism that has successfully, and peacefully, settled hundreds of trade disputes.

The current US approach to trade, if it can be called an approach at all, risks weakening US influence abroad and economically disadvantaging Americans at home. It rests on the false belief that retrenchment of “traditional” US trade policy—by putting America First or catering to a select group of US workers and branding such efforts as “worker-centric trade policy”—will somehow restore the United States to a position of hegemonic dominance with no peer competitor. The reality, however, is that such retrenchment comes with many significant and unforeseen costs that could weaken US leadership in the world. The United States, for the first time since its unipolar moment, is now faced with competition from all corners of the globe and a potential rival in China that could one day upend the status quo. Fears of being overtaken by China should not, however, prompt the United States to sabotage the very order it created and immensely benefited from. Instead of trade wars, what is needed, now more than ever, is to focus on what makes the United States exceptional and to secure a more open and prosperous future at home and abroad.

The problem with trade

The politics of trade have always been contentious. James Madison recognized this early, when writing in Federalist 10, “Shall domestic manufactures be encouraged, and in what degree, by restrictions on foreign manufactures? are questions which would be differently decided by the landed and the manufacturing classes, and probably by neither with a sole regard to justice and the public good.”

Lamenting the power of factions on the legislative process, Madison recognized that adjusting to “these clashing interests” is difficult and could not be done “in many cases… without taking into view indirect and remote considerations, which will rarely prevail over the immediate interest which one party may find in disregarding the rights of another or the good of the whole.” Trade policy was thus vulnerable to capture by special interests clamoring for protection, and these pressures would be difficult to overcome even by a president determined to craft policy for the benefit of the entire country.

Those clashes in US trade policy history are astutely detailed by economic historian Douglas Irwin, who chronicles the countless legislative and ideational battles that eventually led to the trade policy the United States used to lay the groundwork for the international trading system that we have today. Irwin describes the modern era of US trade policy, which begins around 1932, as driven by the objective of reciprocity, where the US government prioritized reductions in tariff and non-tariff barriers through negotiated agreements with other countries.