The Protective Tariff: Defending American Economic and National Security

Tariffs have been critical to protecting both the republic at the time of the founding and today’s domestic industry and economy. From its founding, the United States has pursued protectionist trade policies. During America’s first presidency, United States Secretary of the Treasury Alexander Hamilton implemented conservative protectionist policies to strengthen independent industry against competing foreign industries and lead America away from dependence on the British market. Hamilton held the position of Secretary of the Treasury from 1789 to 1795 and, during this time, he published a Report on Manufactures, in which he advocated for his protectionist theory and argued for nationalist polices to protect domestic industry. He supported “protecting duties,” or “duties on . . . foreign articles which are the rivals of domestic ones,” and the benefits of duties to American manufacturers as a “resource of revenue.” Placing duties on foreign “manufactures,” he believed, provided domestic “manufactures” an opportunity to enter “into successful competition with the foreign material.”

Through Congress’ constitutional power to “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” the early American government implemented taxes and tariffs to protect domestic industry so that it could become self-sufficient and independent from England and Europe. Congress’ power to “regulate Commerce with foreign Nations” has allowed Congress to, for over a century, pass legislation to impose tariffs on goods imported from other countries when policy has dictated a discouragement of foreign trade. Congress has passed legislation, such as the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974, to delegate authority to the president to shape trade policy, including by the imposition of tariffs.

Throughout American history, tariffs have been a tool used by both sides of the political spectrum to protect the United States’ economic prosperity and national security. In the 1980s, under President Reagan, tariffs were implemented to protect American goods from Japanese competition and to protect America’s steel industry. More recently, tariffs have been implemented to protect American industry from China’s unfair trade practices. 

During his first administration, President Donald Trump set out to rebalance the United States-China trade relationship by engaging in trade negotiations with China in an effort to end China’s unfair trade practices and by implementing tariffs on Chinese goods as a protective measure. President Trump took protectionist measures to combat China’s unfair trade practices by imposing four tranches of tariffs, which aimed to pressure China to change its discriminatory, non-market trade practices and to protect American industry.

On January 20, 2025, the first day of his second administration, President Trump released a memorandum on his “America First Trade Policy,” reflecting on the trade policy of his first administration and detailing a renewed trade agenda for his second term. The memorandum states that, in 2017, the Trump administration “pursued trade and economic policies that put the American economy, the American worker, and our national security first.” This America First Trade Policy, the memo says, “spurred an American revitalization marked by stable supply chains, massive economic growth, historically low inflation, a substantial increase in real wages and real median household wealth, and a path toward eliminating destructive trade deficits.”

The memorandum goes on to direct U.S. officials, including the Secretary of Commerce, the Secretary of the Treasury, and the United States Trade Representative, to conduct investigations to address unfair and unbalanced trade relationships. Among the requested investigations is a review of the annual trade deficits in goods including a recommendation of “appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.” The memorandum also directs the U.S. Trade Representative to review the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China to determine whether the People’s Republic of China is acting in accordance with the agreement, and to recommend appropriate actions to be taken based upon the findings of this review, “up to and including the imposition of tariffs or other measures as needed.”

In his Report on Manufactures, Hamilton argued that, to protect and encourage domestic manufactures, the country would need to temporarily protect its industries against foreign producers through measures such as import duties or the prohibition of imports. During his first administration and in his January 20, 2025, memorandum, President Trump has shown that he shares Hamilton’s understanding of tariffs as a tool to protect domestic industry as he sets out to rebalance America’s failing trade deals, to develop “free and fair” trade relationships with other countries, and to protect national security.