For centuries tariffs were an obvious way to raise revenue, and protect a nation's agriculture and industry from foreign competition. Then in the mid-19th century, backed by the economic theories of Ricardo and Adam Smith, Britain abolished the Corn Laws and became the first nation to advocate free trade. Despite the temporary reintroduction of tariffs during the 1930s depression, free trade gradually became widely accepted as creating a prosperous, peaceful world, with more innovation and lower costs. Yet now, it is not only Trump who favours tariffs. The left-wing Democrat Bernie Sanders argues: "Not only must we end disastrous unfettered free trade agreements with China, Mexico, and other countries, we must fight so that American products, not jobs, are our number one export."
Is the future one where free trade is dead and high tariffs are the norm? Will this rescue the declining industries of the US, protect jobs and reduce debt? Or will it undermine trade, reduce innovation, raise prices, lock workers into industries that in the long term will fail anyway, and lead to a global recession?
