| Abstract | The 2025 United States (US) tariff policy targeting its principal trading partners (China, Canada, and Mexico) departs from modern pro-trade economic policy and adopts an unconventional conservative stance on neo-mercantilism. By utilising an indefinite period of protectionism to maintain trade hegemony, President Trump departs from the philosophical underpinnings of List and Hamilton. Rather than attempting to perform empirical estimations (which, given the frequent changes in messaging by the US, would quickly become outdated), we engage in a diagrammatic theoretical approach to elucidate the likely trade implications over time. The long-run expectation of the policy is a contraction of domestic and global consumer welfare. We argue that if the policy aims are to reduce strategic dependence on China, support US firms to internalise operations, incentivise firms to relocate production within the US, and insulate trade networks to align with the US policy agenda, then triggering a trade war through tariffs is unlikely to result in the favourable economic outcomes the Trump administration seeks to achieve. |
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