Trump is wrong. Ronald Reagan hated tariffs 

The episode is just another reminder that allowing economic policy to be dictated by the whims of one man is madness. It’s also unconstitutional. There’s absolutely no way the founders envisioned the president taking on unilateral power over taxation. Hopefully, the Supreme Court can fix the problem soon.

THE BANKING RULE COULD SILENCE AMERICA’S INDEPENDENT VOICES

But Trump’s history is also completely wrong.

He contended to reporters at the White House, “Ronald Reagan loved tariffs. And they said he didn’t. And I guess it was AI or something. They cheated badly. Canada got caught cheating on a commercial … Crooked ad. They knew Ronald Reagan loved tariffs… That’s dirty playing, but I can play dirtier than they can.” 

The Ronald Reagan Presidential Foundation & Institute, to its shame, backed Trump, saying the ad used “selective audio and video” that “misrepresents,” and encouraged people to watch the full speech. 

I did. There’s no artificial intelligence. There’s nothing fake about the ad. It was edited like any other political spot. If anything, the full context of the speech accentuates Reagan’s aversion to Trump’s industrial policy. Here, for instance, is a fuller snippet of Reagan talking about tariffs in his radio address:

“You see, at first, when someone says, ‘let’s impose tariffs on foreign imports,’ it looks like they’re doing the patriotic thing by protecting American products and jobs. And, sometimes, for a short while, it works. But only for a short time. What eventually occurs is first homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then while all of this is going on, something even worse occurs. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs. Higher and higher barriers and less and less competition. So, soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying.” 

The rest of the short speech is no less anti-Trumpian. Reagan discusses the lessons of the Smoot-Hawley tariffs, which deepened and prolonged the pain of the Great Depression. Trump holds, without any evidence, the opposite view: The Smoot-Hawley Tariff Act was passed too late to save the economy. 

Delivered at Camp David before a meeting with the Japanese prime minister, whom Reagan criticized for breaking existing free trade deals, Reagan continues in the speech, “We expect our trading partners to live up to their agreements,” noting he is “loath” to impose even temporary trade barriers.

Reagan also takes the opportunity in this allegedly pro-tariff speech to hit the Democratic-controlled Congress for proposing more trade barriers. Remember, Reagan was the president in 1987, when the executive branch had to deal with real-world political trade-offs in Washington, D.C. Throughout the 1980s, a protectionist Congress was pushing for long-term trade barriers. Reagan instituted temporary, targeted tariffs to head off more damaging, wide-ranging import taxes and quotas from Congress, which in the 1980s still exerted power in a meaningful way. 

Reagan might have vetoed protectionist bills, but he didn’t recklessly circumvent Congress’s constitutional taxing power by inventing a string of bogus emergencies. On Liberation Day, Trump slapped tariffs on every nation in the world, even those with lower reciprocal rates. The notion that Canada poses a national security threat is preposterous. 

In any event, if Reagan really “loved tariffs,” he would have had ample opportunity to install them.  As Reagan biographer Steven Hayward pointed out, 1985 saw 300 protectionist bills introduced in Congress. That year, Reagan vetoed a bipartisan bill that would have limited imported textiles and shoes. The New York Times reported that the administration “maintained its staunch opposition to protectionism while taking a more aggressive stand to try to pry open markets abroad for American exports.” Reagan vetoed the same bill again in 1988.

“This bill represents protectionism at its worst,” he wrote to Congress. “The supposed benefits of the bill would be temporary at best. Protectionism does not save jobs.” 

Here is a chart laying out the average tariff rate in the U.S. from 1821 to 2016. Does it look like “Reagan loved tariffs?” 

The national average tariff rate was 3.4% when Reagan was sworn in. It was 3.4% eight years later when former President George H.W. Bush was sworn in. Remember, as well, that Reagan signed the U.S.-Canada Free Trade Agreement in 1988, the precursor to NAFTA, which the Heritage Foundation noted in 1993 was Reagan’s “vision realized.”

Yet, to create the impression that Reagan was a fan of tariffs, protectionists often glom onto contemporaneous libertarian critiques. And if you’re a free-trade absolutist, the former president’s record is a mixed bag. But he’s a veritable Adam Smith compared to Trump. 

Protectionism is one of the only enduring positions Trump has ever held. It was his rants against Japanese trade that first made him a political entity. On the other hand, despite occasionally giving in to political pressures, Reagan held the opposite view in public and private. In his diaries, he consistently opposed trade barriers. 

“There is a threat of protectionism widespread here & abroad. We must oppose it & strive for free trade,” he wrote.

“The textile bill is a veto candidate — pure protectionism,” he continued.

“Breakfast with Sen. Repubs. — got a few things off my chest & took some Q’s. from a few of the dissidents — mostly on the trade imbalance & some need for protectionism. I let them know I’m against it,” he wrote.

And so on.

On the rare occasion that Reagan justified tariffs, as he did on semiconductors, he stressed the short-term nature of the policy that would create space for American companies that had been knocked down by the previous decades’ constricting regulations and high taxes to recover.

“Harley-Davidson motorcycle plant. They have done a remarkable job climbing out of a slump. Japanese competition was destroying them,” he wrote on May 6, 1987. “We invoked a 201 a temp. use of tariffs to allow them to reform to meet that competition.” (Italics mine.)

Nowhere could I unearth any quote from Reagan defending protectionism on philosophical grounds. Quite the opposite. Reagan’s 1990 autobiography, An American Life, addresses the immense pressure he faced early in his first term to implement foreign car quotas:

“I believed that the new competition Detroit faced, like all competition, was good for it and good for consumers — a spur that would motivate our auto industry to produce better cars. That’s how the free enterprise system works. I believed that once we started down the road to protectionism, there would be no way to turn back, no way of telling where it would end.”

A long passage then follows on his ideological evolution on the topic. 

AS A THEORY OF EVERYTHING, THE ‘GREAT FEMINIZATION’ FALLS SHORT

In contrast, Trump finds protectionism “beautiful” and has said it would make the U.S. wealthy. He doesn’t argue that we need tariffs to help American companies better compete in open markets, but rather that they can’t compete in them. Trump’s ideal nation runs as an autarky. Though, of course, reality keeps forcing him to roll back tariff rates. Trump and his fans support tariffs either as a means of lifting the working class and saving the Rust Belt or instituting fairer, open trade — it just depends on the day. 

Now, if you believe that allies shouldn’t be allowed to run ads in the U.S., or that the modern world necessitates we return to 19th-century mercantilism, that’s fine. It’s wrong, but fine. What isn’t fine is saying Reagan was a fan of tariffs. There is overwhelming evidence to the contrary.