Sometimes when you are at an historical inflection point, it is hard to discern that fact amid the noise. February 20, 2026, may find its way into the US history books as marking this era’s peak-and-decline moment for US executive branch intervention in America’s international trade, investment, and technology flows.

By unequivocally cancelling President Donald Trump’s most flexible and most aggressive legal methodology for taxing imports, the Supreme Court added constitutional checks to constraints already imposed by financial markets and the political protests of distraught traders and internationally active corporations.

According to Professor Douglas Irwin of Dartmouth College, the grand sweep of US economic diplomacy history has been largely defined by tariff policy, and falls into roughly three eras, each starting with an “R.”¹

An era of revenue accumulation

The first era stretched over roughly six decades, from the founding of the republic to the Civil War, and was defined by high tariffs used primarily for revenue.

In those days, the United States was very dependent on foreign trade — with trade as a proportion of GDP at high levels that would not be seen again until the end of the 20th century. The growing American economy imported European manufactures and exported agricultural goods. There were few sources of revenue for the young nation, so tariffs were seen — especially in the North — as a necessary way to pay for the government and the military.

Tariff rates fluctuated wildly between 30% and 50% in the early years. Southern Democrats eventually got the upper hand around 1830, and tariffs started falling and dropped to 20% before Abraham Lincoln took the stage and changed everything.

An era of restriction

After the Civil War, the dominant northern Republicans kicked off a new era of American foreign economic relations defined by restriction, which lasted seven decades until the time of Franklin Roosevelt, the New Deal, and the Second World War.

Manufacturers based in New England and New York, and then Pennsylvania and the Upper Midwest, successfully pushed for consistent nominal tariff rates that stayed high in the 40% to 50% range. There was a brief tariff respite associated with the First World War, and an even briefer uptick to 60% for the ill-timed Smoot-Hawley Tariff Act of 1930. (Each springtime, a fresh round of American high school students are confused by the Smoot-Hawley Tariff Act, as documented in this fine clip from the 1986 comedy classic Ferris Bueller’s Day Off).

Overall, however, policy throughout the seven decades of the Restriction era was quite consistent, and highly protectionist by later standards under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). One innovation during this era was to become more selective regarding which import items were taxed and which were not — a form of astute market-bending industrial policy that is quite familiar to those who study the economic rise of Asia in the latter part of the 20th century.

An era of reciprocity

The third era, kickstarted during the Second World War but pursued in earnest by the United States starting in the 1950s and 1960s, was the age of reciprocity.

The United States created GATT in 1947 and pursued a series of hard-won multilateral trade liberalization agreements. For eight decades up to the time of the 2016 Clinton vs. Trump election and the shredding of the Trans-Pacific Partnership (TPP) agreement, the United States sought to trade improved access to its own market in return for better access to export markets overseas.

As multilateral negotiations became more cumbersome, the United States emphasized bilateral free trade agreements, which became remarkably comprehensive — reaching beyond mere tariff reduction to introduce non-tariff barrier elimination, regulatory harmonization, and the “Gold Standard FTA” to the growing lexicon of globalization initiatives. Seeing that its huge investments in time and political capital required for bilateral agreements were becoming inefficient, the United States eventually shifted to plurilateral approaches like the North American Free Trade Agreement (NAFTA, still alive as the US-Mexico-Canada Agreement, if struggling) and the TPP (from which Washington ultimately turned away in 2017).

There were rumblings of protectionism from time to time during the Reciprocity era — most notably a brief period of tough market restrictions imposed on Japan, which triggered a flood of beneficial Japanese investment into North America. But even as recently as just 12 years ago, the United States appeared poised to succeed at an incredibly ambitious liberalization goal: systematically circumventing the balky WTO and indirectly tackling the growing China problem by using principles of reciprocity to establish deep and lasting plurilateral liberalization pacts with like-minded nations in both Europe and Asia. The thought was that by setting the bar high for liberalization in the leading economies, the Global South could be entangled by these enlightened rules and have no choice but to eventually follow suit.

A return to restriction

The inauguration of Donald Trump in 2017 marked a sharp and clear end to the Reciprocity era. The reasons for this dramatic change in US foreign economic policy — and its bipartisan embrace by both Republicans and Democrats — are complex, and a topic for another day.

But it is fair to say that Trump has now attempted to launch the United States firmly back into the Restriction era. The overall average weighted tariff, at somewhere between 12% and 14% today, even after the Supreme Court decision, is the highest since the 1940s. Perhaps President Trump is being intentionally ironic in calling his unilaterally imposed taxes “reciprocal.” But regardless, his rationale of raising revenue and onshoring manufacturing production would sound very familiar to 19th century Republicans.

Let’s review what has happened in political as well as economic terms. The President focused just on China during his first term. But starting with the dramatic pronouncements of “Liberation Day” in 2025, President Trump has explored the outer boundaries of American tolerance for a sudden and sharp return to the Restriction years of the 19th and 20th centuries.

Meanwhile, in the interregnum between the two Trump administrations, Democratic President Joe Biden took no steps to move back to Reciprocity. Instead, he piled on additional China-focused tariffs and pulled the nation sharply in the direction of government subsidies for favored industries. Most of all, Biden pioneered a prioritization of national security over market expansion in his ordering of foreign economic relations.

In response, American financial markets, American voters (if one believes opinion polls), and now the US judicial branch have all reacted negatively to Trump’s protectionist vision. Congress has remained cowed and uncertain, and many legislators no doubt appreciate the power of protectionist rhetoric. But overall, political trend lines in 2026 now appear to be pulling decisively against the notion of any grand return to the distorted prices of a Restriction era-type regime. Meanwhile, President Trump himself has balked at the constraints imposed by a Biden-style “securitization” of international economic activity, and he has cast aspersions on some centrally planned industrial subsidization programs while embracing others.

Politics and voters will shape the way forward

Where does this leave us? If we are at a new inflection point, where are we going?

In the immediate term, it appears that President Trump’s protectionist leadership will tread water, with the White House replacing the overturned tariffs with new legal tariff authorities. But the added complexities of temporary Section 122 measures, sector-specific Section 232 measures, and nation-specific Section 301 measures, will create opportunities for counterpart economies to gradually start to push back against US unilateralism — with cross-border investment requirements and international technology cooperation needs pulling the United States slowly back to the norm.

Perhaps most important, tariffs, protectionism, and inflation will be front-and-center in this November’s Congressional elections, raising a strong possibility that Congress will regain its voice on foreign trade matters. In 2027, we may see Congress once again seek to leverage the provisions of Article One of the Constitution that clearly assign power to Capitol Hill to regulate commerce and set taxes.

Taken as a whole, and given rapid technology change, wide gaps in household income, and a prevailing sense of economic insecurity among common citizens, it feels unlikely that the United States will easily return to the Reciprocity era approach pursued by US presidents stretching from Harry Truman to Barack Obama. But it also feels like Trump’s Restriction era revival movement may also have peaked due to public concerns about inflation and instability resulting from capricious policymaking.

On balance, one can expect to see high tariff levels plateau for some years, before gradually dropping, as economic policy managers start to worry less about manufacturing and instead seek to tackle other pressing concerns such as contending with an economy defined by computers and robots.

Ambassador Kurt Tong is Managing Partner at The Asia Group and an Advisor to the Hinrich Foundation. This commentary was reproduced from TAG AI for the Hinrich Foundation.