On Feb. 19, 1904, a young English politician delivered a speech at Free Trade Hall in Manchester, England. For more than 90 minutes, he spoke with precision, wit, and humor, drawing guffaws as he excoriated the protectionists in the British Empire who believed they could raise the standard of living through tariffs.
“It is the theory of the Protectionist that imports are an evil. He thinks that if you shut out the foreign imported manufactured goods, you will make these goods yourselves, in addition to the goods which you make now, including those goods which we make to exchange for the foreign goods that come in,” the conservative member of Parliament said. “If a man can believe that, he can believe anything.”
The comment drew laughter. Those in attendance witnessed a rising star in British politics, a man who’d become arguably the greatest statesman of the 20th century and an orator for the ages.
Winston Churchill’s speech at Free Trade Hall is considered one of his finest, which is remarkable since he was only 29 years old at the time. And though his speech was applauded by those in attendance and lauded by the press — the Times called it “one of the most powerful and brilliant he has made” — it was a sore spot with the Conservative Party, which was growing increasingly hostile to free trade and immigration.
Fast forward 120 years, and protectionism is alive and well — especially in the United States, where tariffs have become the cause célèbre of economic policy debates. The resurrection stems primarily from President Donald Trump, who has long talked about his fondness for tariffs, which he’s called “the most beautiful word in the dictionary.”
On Tuesday, true to his word, Trump unveiled details of his tariff plan, which he called “Liberation Day.” His plan included an immediate 25% tariff on foreign automobiles and a baseline tariff of 10% on virtually all imported goods.
It’s an odd turn for the party of President Ronald Reagan, who warned that high tariffs stifle economic innovation, burden consumers with higher costs, and trigger a vicious cycle of retaliatory trade barriers that ultimately weaken all countries.
As recently as 2020, nearly 80% of Americans — Republicans, Democrats, and independents alike — saw foreign trade as a path to economic growth and increased exports. Today, GOP support of trade has plummeted. A 2024 Pew Research survey found that 73% of Republicans said the U.S. lost more than it gained from trade, compared to 25% of Democrats. How this shift has occurred is not a mystery.
Trump and Vice President JD Vance have sold Republicans on a narrative protectionists have peddled for decades. It’s based on the idea that America’s middle class has been “hollowed out” by trade and that other nations “dump cheap exports” into our country. Tariffs, they say, will protect American industries and restore the U.S. to its former glory as a manufacturing superpower.
The message is hardly new. Former White House Communications Director Pat Buchanan made a similar protectionist case during his failed 1992 presidential run, in which he promised to “Make America first again.” (Yes, really.) Buchanan argued for tariffs as a shield against what he saw as unfair foreign competition, warning that free trade agreements would gut American manufacturing, cost domestic jobs, and erode national sovereignty. Then, the boogeyman was Japan. Today, it’s China.
Trump, like the protectionists of old, has said all he wants is “a level playing field” because numbers are “so disproportionate, they’re so unfair.” This ignores the reality that the U.S. ranks 69th in the world in trade freedom and has higher trade barriers than most of its trading partners.
Time will tell if America’s trade partners retaliate by adding new trade barriers, something European Commission President Ursula von der Leyen has signaled is likely.
What’s clear is that Trump is playing with fire. Free trade is the engine of prosperity. It fosters competition that benefits consumers with lower prices and better products. Global trade growth has enabled the standard of living Americans today enjoy and lifted millions out of poverty.
Markets have been rattled by the renaissance of protectionism in recent weeks, with the Nasdaq composite slipping into correction territory. On Thursday morning, markets plunged further, with the Dow Jones Industrial Average cratering 1,300 points and the S&P 500 declining 4% and on pace for its worst day since September 2022.
There’s good reason. The worst economic depression in American history was caused not by a stock market crash but by the response to the market crash: The Smoot-Hawley Tariff Act.
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Trump believes his tariffs will make America great again, but Churchill understood economics better.
“To think you can make a man richer by putting on a tax,” he quipped in Manchester, “is like a man thinking that he can stand in a bucket and lift himself up by the handle.”
Jon Miltimore is a senior editor at the American Institute for Economic Research. Follow him on Substack.