A leading scholar on trade history and former president of the Economic History Association, Irwin is the author of seven books, including Clashing over Commerce: A History of U.S. Trade Policy, which The Economist and Foreign Affairs selected as one of their best books of the year, and Free Trade under Fire. 

Given the renewed outbreak of U.S. protectionism, let’s start with a brief historical overview on tariffs. 

Sure, I can talk about “the three Rs”—revenue, restriction, and reciprocity—which are the primary purposes of tariffs throughout history. Tariffs raise revenue. That was important early on in U.S. history when there were no other taxes. We’ve had tariffs since 1789. Restriction is when you’re actually trying to restrict imports, keep them out of the domestic market to protect domestic producers from foreign competition. That also turns out to be historically an important objective of the federal government in imposing tariffs. And finally, reciprocity, the ability to adjust your tariff in line with other countries. There are two forms of reciprocity: a positive form where you say, “We’re going to reduce our tariff if you reduce yours,” in a trade agreement; and then a negative form where you raise your tariffs against a particular country to retaliate against what you perceive as unfair treatment or unfair trade practices on their part. That’s where we are today. 

Does President Trump use all three Rs interchangeably? 

It’s sort of an amalgamation of all three. The administration wants the revenue to offset the cost of tax cuts or extending tax cuts. They also like restriction because the president wants to keep out foreign steel and aluminum to help our domestic steel and aluminum industries. And he’s also talked a lot about reciprocity, where, as he put it, if countries charge us, we’ll charge them the same amount. Now, you might think an agreement where we have pure reciprocity would be to his liking. Canada charges zero tariffs on U.S. goods, we charge zero tariffs on Canadian goods—that’s a level playing field. But he still doesn’t like it. Hence, the complaints about fentanyl flows and migration flows across the border. That’s when he threatened 25 percent tariffs against Canada and Mexico. From an economist’s standpoint it’s very hard to see the economic rationale of that. It just seems very punitive and out of proportion to problems at the border, particularly in relation to Canada. 

You presciently titled your 2002 book Free Trade under Fire. 

Free trade is always politically controversial. Always there will be some groups that are aggrieved and perceive that they’re going to lose as a result. What’s happened over time is the nature of the attack on trade has changed. That’s why I’ve had to do five editions of the book. It’s sort of a moving target. Back in the 1980s, Americans were concerned about Japan. Then in the 2000s, we worried about the World Trade Organization being this faceless bureaucracy that was going to undermine our sovereignty and tell us what to do. 

Do tariffs enable firms to innovate, or do they just raise costs? 

It’s competitive pressure that forces firms to innovate. One problem with the steel tariffs that the administration has been considering is that they’ll save some jobs in the steel industry and help some firms, but there are many more firms and many more workers in steel-using industries, and you raise their costs. Think about John Deere or Caterpillar. They buy a lot of steel, and you’re raising their costs, and they’re competing against Komatsu and others that don’t have to pay those costs. People would rather import the cheaper product from abroad than buy from here with those inflated costs. 

Do you think tariffs will inevitably be inflationary? 

If these tariffs take effect, Irving Oil, for example, has said it will have to mark up the cost of propane and heating oil and fuel that it imports to the United States. Ultimately, business consumers or households will end up paying the bill, but not all consumers can afford to absorb that. I would say that tariffs raise the price of the goods subject to them, but strictly speaking that’s not inflation, which is a sustained increase in most prices usually due to monetary policy and the Federal Reserve. 

Are there any winners with tariffs? 

Smaller- and medium-sized domestic businesses that compete against imports might reap some advantage. But the problem is that so many larger businesses are globally sourcing and globally selling. They’re really connected with the rest of the world, and they’re going to get hit, either in terms of foreign retaliation to U.S. tariffs. So they won’t be able to sell as much overseas, or their costs will go up in a way that their competitors’ costs do not go up because the tariffs just affect those that are producing here in the United States. I think most economic analyses suggest there are no overall winners. It will hurt the economy overall. 

Are tariffs a remedy for those harmed by free trade in the past? 

There’s an old joke about using tariffs to remedy past harms. If you accidentally run someone over with a car, and say, “Oh, I’m sorry,” put it in reverse, and go backwards, you just compound the harm. We didn’t deal with the adjustment to free trade perfectly. But the adjustment to higher tariffs is going to be very disruptive to U.S. employment and income. 

How much will tariffs proposed on Canada and Mexico cost the average U.S. family?

Some estimates put the consumer cost at about $1,200 to $2,000 per household. The cost of everything from avocados to automobiles—and some goods that don’t start with the letter “a”—will increase. And these tariffs are regressive, meaning that the burden falls disproportionately on lower-income households. Even if more money flows into the U.S. Treasury with higher tariff revenue, the tax system becomes less progressive the more we rely on tariffs. 

What problems do repeated reversals on tariffs create for U.S. businesses attempting to plan long-term strategies and investments? 

Past trade agreements simply don’t mean much if the president can unilaterally violate them and impose tariffs with no checks at all. That creates uncertainty and hurts investment and economic growth. Tariffs also create scarcity, since you’re no longer able to import as easily, and that means higher prices. We always talk about how consumers will pay that higher price. But it’s punitive for business as well. 

Marshall Auerback is a research associate at the Levy Economics Institute of Bard College who writes about markets and the global economy. Given the timeliness of this topic, the online version of this interview has been released in advance of the full May-June 2025 online and print versions.