What 1 Liberal Tariff Supporter Thinks Of Trump’s ‘Liberation Day’

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President Donald Trump’s announcement of blanket, across-the-board tariffs on almost every country in the world, including islands solely populated by penguins, have sent markets tumbling and pushed foreign nations to impose their own reciprocal tariffs on U.S. goods.

Tariffs aren’t in any way a new tool for a country to use to raise revenue, or to block foreign imports in order to give an advantage to domestic production. Former President Joe Biden enacted stringent 100% tariffs on Chinese electric vehicles to protect the EV industry in the U.S. in 2024, for example. But Trump has done something completely different. And it’s not in the high tariff rate he’s put in place.

“The difference isn’t the number, the difference is the scope,” said Todd Tucker, industrial policy and trade director for the liberal Roosevelt Institute. He points to the Biden administration’s carefully considered choices of where to apply tariffs versus Trump’s sledgehammer approach. “[Biden] decided that some industries are strategic. That isn’t going to be true of all industries, so we’re going to have an industrial policy for the clean energy sector, but that doesn’t mean we have an industrial policy for every industry under the sun.”

“[But] this tantrum that Trump is throwing,” he added, “is not well-reasoned and not well-thought out.”

Furthermore, Trump has put forward multiple justifications for his tariffs that are plainly contradictory. He wants to reshore manufacturing to rebuild the working class. But he also wants to use the tariffs to raise revenue, which he says should replace the income tax. The one precludes the other.

“If you’re looking for the revenue-maximizing tariffs, you would not want to see any domestic development, or any substitution for domestic production at all, because you’d want to have exactly the same level or more of the imports paying the tariff rate [as before they were enacted]. Those purposes are at odds with each other,” Tucker said.

At the same time, Trump says he may use these tariffs to renegotiate different economic terms with every country in the world, in which case they may not raise revenue or reshore jobs.

So what the hell to make of all of this?

HuffPost reached out to Tucker, a liberal policy wonk and trade expert who backs tariffs, at least when they’re deployed strategically alongside other policies that protect workers, consumers and actually help grow domestic industries, to help explain what exactly is going on with Trump’s tariffs.

Read the full interview below:

What do you think about Trump’s blanket tariff announcement on Wednesday?

If we go back to Trump, we saw a lot of threats, a lot of tweets, about using tariffs in different ways, but because you had a lot of Wall Street hands in the Cabinet that disagreed with his tariff approach and you had pretty sophisticated economic nationalists like [former U.S. Trade Representative] Robert Lighthizer with Trump’s trust to execute on a smarter or more strategic trade policy. The net result was, despite the threats, you didn’t have that many tariffs. You had some tariffs on China and some tariffs on specific products.

The real bipartisan transnational achievement was the renegotiation with Canada and Mexico’s support and with Democrats’ support of the U.S.-Canada-Mexico agreement, which Biden used super aggressively to enforce labor rights protections for workers in Mexico and really showed, using that tool that Trump and Lighthizer created, that you could use trade to benefit workers.

That’s what we had in Trump I, but what we’re seeing in Trump II is completely different. There’s a lot fewer guardrails on his behavior, and as a result, the policy that’s being rolled out is less thoughtful, less strategic. It’s just really pushing executive authority to its outer bound extreme in a way.

The courts in the first term were willing to let him get away with the country-specific and commodity-specific tariffs. Once you start talking about across-the-board universal tariffs of 10%, at some point, a court is going to look at that and question whether even the most minimal guardrails that do exist in the National Emergencies Act, whether the minimal guardrails have been met. Basically, there needs to be the existence of an emergency, the emergency needs to be unusual and extraordinary, and Congress needs to be kept before, during and after. If you think of that in terms of other parts of administrative law, that doesn’t seem like a lot of guardrails, it seems pretty minimal. But, I think, even that guardrail they have not cleared.

Yesterday’s announcement was called an effort to establish reciprocal tariffs. There is a way you could have done that. You could have had an expert agency, even one staffed by Trump-friendly folks, go through tariffs and assess what types of tariffs are being charged, what kind of non-tariff policies that you’re concerned about and come up with a number that can compensate against that. That’s really why we have all of this trade administrative state bureaucracy, whether it’s the U.S. Trade Representative’s office or the International Trade Commission. There are talented civil servants in those places that if you gave them a few months, they could come up with meaningful numbers. Instead, it seems like they just pulled math out of their back pocket to come up with numbers that are arbitrary and capricious.

For all of Trump’s concerns about bilateral trade deficits, we’re applying tariffs to countries that we have trade deficits with, that we have trade balances with, that we have trade surpluses with. It’s really across the board. Some countries are getting that made-up tariff number cut in half. Others, like the U.K., despite us having a trade surplus with them, are getting hit with the 10% without the halving of it. You’ve got a lot of discrimination between these otherwise similarly situated actors.

We may be seeing the beginning of the end for this type of emergency presidential authority. A lot of these policies have their roots in the New Deal and World War II era where FDR wanted to be put in a more equal position with the prime ministers of the world, who, if they win elections, can kind of govern the way they want to. In the U.S. system, there’s always the possibility that Congress isn’t going to want to work with you. So, we created these emergency powers for when push came to shove the U.S. could respond in kind to international economic developments in the same way a prime minister could.

What we’re seeing now is, by pushing this to the outer brink, without giving reason, documentation, consultation, you know — I was really surprised to see the Senate issue its disapproval resolution for the declaration for emergency with Canada. I was surprised, frankly, to see any Republican go along with that. It’s due to the context of what’s been unfolding over the past few days where the administration has been barreling down this tunnel towards an economic collapse. Where that lands remains to be seen, but it depends on the economic impact in markets over the next few weeks.

You are an advocate of tariffs in some instances. What do you see about these particular tariffs, the blanket tariffs, that either you might support or where do you think has gone wrong from the approach that you would take?

For some people that have looked at Trump’s tariffs, there’s one group of people saying, “If Trump is doing it, it must be bad.” That’s one reaction. Then there’s one more neoliberal reaction from folks that never liked tariffs anyway who say, “Well, a tariff is a tax and a tariff is bad because it’s a tax and a tax is bad because it’s going to raise the cost of imports.” And, to me, that’s a strange critique to make, because it’s sort of like saying, “I don’t like the progressive income tax because it squeezes billionaires.” Yeah, that’s like the definition of what the progressive income tax is. You can not like that outcome, you know, it’s not really a basis for a substantive critique. Tariffs do work, this is something that [liberal blogger] Matt Yglesias wrote about that I agreed with, is that tariffs work by raising the relative cost of imported products. That is how they work. Now, there are certain instances where maybe the full costs don’t get passed through 100% or there are other considerations where you don’t have the full pass-through to price increases. When that happens, great for everyone. But, in general, in Econ 101 terms: You’re trying to make domestic industry more competitive by increasing the relative cost in strategic sectors.

What you see with this across-the-board tariff is it’s broadly inflationary. It’s like saying the cost of everything goes up, not just, say, the cost of assembled cars is going to go up. Instead, you’re saying everything is going up. So, whatever benefit you might see for auto workers or other industries from a higher tariff, you kind of just erase if everything else that goes into making a car goes up by that amount.

You can contrast that with what Biden did, which is, arguably to a fault, they deliberated over which sectors they would offer tariff protection to. They ended up finalizing a list after a couple of years after the Inflation Reduction Act passed where they realized that the sectors they should protect are the ones that were subsidized — like electric vehicles, like chips. The reason there is super clear. If you’ve just invested trillions of dollars over the decade in these industries that you deem strategic, the last thing you want to have happen is effectively unlimited Chinese capacity overwhelm the market and kill, stillborn, those infant industries you’re trying to promote.

These were high tariffs. The difference isn’t that Trump has a high number and Biden had a low number. No, Biden had a high number. It was 100% on electric vehicles. That means you’re basically not getting any electric vehicles from China. That’s pretty prohibitive. The difference isn’t the number, the difference is the scope: Where you’ve decided that some industries are strategic, that isn’t going to be true of all industries. We’re going to have an industrial policy for the clean energy sector, but that doesn’t mean we have an industrial policy for every industry under the sun.

Now, we’re just seeing this tantrum that Trump is throwing that is not well-reasoned and not well-thought-out.

You advocate for trade policy coming paired with other policies that promote manufacturing whether it’s industrial policy or labor policy. Is the Trump administration doing any of that here?

If you look at how Biden did industrial policy, it was all of the above. It was mostly subsidies, some economic development planning, support for labor and the real footnote to it was the tariff. That was the last thing they did. It was after they had used a lot of other policy tools. And basically in the face of being imminently overwhelmed by something that was new — something that was an unusual and extraordinary threat. Over the course of a year, China produced enough cars and batteries to effectively dominate the entire [electric vehicle] market. That was truly an unusual and extraordinary event. That’s why you had folks in that administration who may not have agreed with tariffs, generally speaking, going along with it because they could see this was something exceptional. In this scheme, tariffs are your insurance for your main policies. The subsidies are doing most of the work. It’s mostly carrots because we don’t want to see prices go up for consumers and when we do use tariffs, it’s for products we aren’t importing anyway. So it’s more of a forward-looking thing rather than something that’s going to immediately raise costs.

What’s different here with Trump is that he’s stripping away those other tools altogether and using tariffs only. That’s a very blunt instrument and one that’s likely to be purely inflationary. There may be some exceptions to that. If you talk to the United Auto Workers or the Steelworkers, they can say, “No, if you give us tariff protection today, we can open a facility tomorrow because it was just idled a few weeks ago.” In those instances, tariffs can make a lot of sense.

But, generally, if you’re destroying the National Labor Relations Board, if you’re illegally rescinding and cutting Inflation Reduction Act subsidies, you’re just shredding any kind of certainty that could exist in the market. Not just like you gave a promise to a given company that you were going to give them a subsidy, but you’re actually attacking the very idea of contractual integrity by making it deeply uncertain whether anyone can trust what the government even says anymore. Whatever benefit might accrue to certain sectors is going to be swamped by all the other stuff they’re doing to undermine worker rights and contractual integrity. At the end of the day, it’s going to be a net negative.

When Trump announced this, the administration seems to give multiple different rationales for this whether it’s bringing back manufacturing or raising revenue or wielding this, as he’s done with universities and law firms, as a tool to bludgeon U.S. corporations or foreign nations. If we’re talking about this in terms of bringing back manufacturing, these different rationales appear contradictory.

If you go back to Econ 101 principles, the point of tariffs is to raise the relative cost of imports so your domestic production can thrive. If it’s working, hopefully you’re not collecting much tariff revenue at all because it means you’ve successfully reclaimed the market share for your domestic producers. The imports aren’t coming in and paying the tariff, they’re just not coming in.

But if you’re looking for the revenue-maximizing tariffs, you would not want to see any domestic development or any substitution for domestic production at all because you’d want to have exactly the same level or more of the imports paying the tariff rate. Those purposes are at odds with each other.

There’s a reason why very poor developing countries, including the U.S. when it was developing and poor, use tariff revenue. If you lack government capacity altogether, it’s a lot easier to run a custom house at your port than to run an income tax, which requires a sophisticated modernized IRS. The poorest countries of the world, the Malis and Lesothos, may not be able to go after their own oligarchs when it comes to taxes they owe, but they can control the port. It’s not the best way to fund your government, but it is a way that very capacity-constrained countries can do. The U.S. was such a country 100-plus years ago.

There is a time and place for customs revenue, but there’s a reason why more developed countries don’t do it because you’re going to get more bang for your buck from having progressive income taxes.

On the geopolitical side, it is unfortunate that there are a lot of things that the U.S. has demanded under Republican and Democratic administrations for decades, like Europe spending more on its defense, like China promoting its own domestic consumers’ buying power and not just trying to export its way to economic development. We’ve asked these countries to do something to rebalance their economies for sometime. And, it’s honestly breathtaking, the extent to which Germany just amended its Constitution to allow for more public spending, not only defense, but clean energy. You have a lot of these countries taking very seriously for the first time their own economic future. That’s really inspiring to see that. It’s very unfortunate that it’s taken Trump to do the thing that gets them to do that.

Now, I don’t think that’s ultimately good for the U.S. over the long haul. I think that we have important, complicated, collective challenges that we’re going to need to address in the future. We’re going to have a very difficult time convincing any of our trading partners to take us seriously given the kind of credibility we’ve shred. On the one hand, the chaos and unpredictability has pushed countries to do what they should have been doing anyway. On the other hand, because of the way we’ve done it, it’s going to come at the long-term credibility of the U.S.

Yeah, these policy changes by foreign countries seem to be caused by threats that wildly antagonize and alienate some of the U.S.’s closest allies. What is the cost incurred here?

Well, Biden had a lot of ideas where he was asking nicely. With Europe, they were looking to do a post-neoliberal trade agreement. Let’s do a trade agreement where we create a shared U.S.-European market for low-carbon steel. If we can figure it out in that sector, then we can expand to other sectors and we can figure out a whole new way of doing trade agreements. And they were just met by foot-dragging.

That’s unfortunate. It was kind of a window during which we might have been able to show American and European workers that there was a more pro-labor, high-road way of doing trade policy. It’s really tragic that we weren’t able to land those deals or come up with a way of thinking about this policy during more agreeable times.

As to the public rationales from the administration, there is another one that they don’t talk about. Yanis Varoufakis, the left-wing former Greek finance minister, had a column recently talking about how Trump’s economic strategy is really about lowering the value of the U.S. dollar in order to boost exports. Do you see any reality to that in what Trump is doing here or whether any of his actions could undermine such a policy?

This is one of the toughest aspects of the policy to evaluate. If you look at the things that [Council of Economic Advisors Chair] Stephen Miran has said or [Treasury Secretary] Scott Bessent has said, there is a coherent theory there. We’ve done rebalancing in the past after the Bretton Woods agreement collapsed. We’ve had these moments where we’ve kind of negotiated rebalancing of economic imbalances.

But in those previous episodes, a lot of what it took was very sophisticated diplomacy and attention to neutralizing the impact of the instability on your domestic workforce. If you look at what Nixon did in 1971, he did a 10% across-the-board tariff as well, but recognizing that it could be massively costly to the average consumer, he also implemented price controls across the board. It was justified as saying, if we’re going to create the possibility of this domestic market for our protected companies, we want to make sure they don’t price gouge. That’s going to come at the expense of their profits and their bottom line, but that’s fine because we’re trying to move into this new equilibrium and want to keep everyone whole while we do it.

You don’t see anything like that coming from Trump. They’re not talking about inconveniencing U.S. industrialists in any major way as part of the price for moving to a less financialized, more production-oriented economy. They’re not talking about any sort of shared sacrifice. The sacrifice they’re talking about is that workers may be hurt and consumers may be hurt. Maybe, if you listen to the best possible version of what they’re selling, then five to 10 years down the line, we’ll be better off as a result.

Democratic counties don’t have a great track record of asking their citizens to endure hardship or some kind of collective sacrifice unless it’s really clear what the end of the road is going to look like with some degree of confidence that your government is going to be able to manage it. Why would anybody have any confidence of what that endpoint is going to be, just given the chaos of all of this policy rollout?

I could imagine a different kind of universe where the U.S. does end up tackling some of these systemic imbalances, but you would need to have a lot of diplomatic capital. You would need to have a lot of trust with your domestic citizenry and you would need to be willing to use all the tools of government to make this rebalancing happen, including going after price gougers.

Trump sometimes says that he lobbies the auto companies to not increase their prices or whatever, but he’s not going to do anything about it. It creates a super low-trust environment, both domestically and internationally, to be able to do something this complicated.

On the other hand, he’s going to create a lot of crises and he’s going to be able to resolve the crises by turning the pressure back down. Whether there is some possibility, as there was in the first Trump administration, to use his ratcheting up and manufacturing of a crisis with Canada and Mexico as the first act in a multi-act play that culminates in a renegotiation that everyone’s a really big fan of, like the USMCA, there’s maybe a possibility to do that. But with every day of chaos and with alienating the partners that you would need to make that happen just makes it a lot less likely.

It seems like the alienation has gone pretty deep. Just look at statements from Canadian Prime Minister Mark Carney or the Europeans.

They need some confidence that they did the tough task of agreeing to renegotiate NAFTA in the first Trump administration on the basis that it is going to restore certainty and restore the credibility of U.S. commitments. You can kind of get away with taking people off guard once. But if you do it multiple times, they’re just going to ask, “If we even engage in a costly renegotiation of the trading relationship, what’s to keep him from shredding that tomorrow when he has a different thought?”

You have foreign policy scholars talk at length about the importance of international credibility — of words mattering. You think, well, this may be a little bit overdone. Maybe real material factors matter more than words. But I think, in this case, you really do see people not being able to take America at its word.

It’s corrosive to any kind of joint project.

This interview has been edited for clarity and length.