No, Reagan Was Not Pro-tariff

President Trump past week ended waste and acquisition talks pinch Canada because of an advertisement sponsored by nan Ontario authorities featuring snippets of a 1987 speech Ronald Reagan gave, explaining nan dangers of protectionism. The constituent of nan advert was clear: protectionism hurts everyone, including nan state imposing nan protectionist policies. In response, nan Ronald Reagan Presidential Foundation & Institute has said that “the advertisement misrepresents nan Presidential Radio Address, and nan Government of Ontario did not seek, nor receive, support to usage and edit nan remarks.”

While it is presumably existent that nan Government of Ontario neither sought nor received support to usage and edit nan remarks, nan mobility of whether Reagan’s wide position of tariffs and waste and acquisition was misrepresented isn’t really unfastened for debate. No, nan advertisement uses Reagan’s ain words to beautifully seizure his opinionated support for free waste and acquisition and exchange. Reagan would person approved nan overarching connection of nan ad, moreover if we must work together pinch nan Foundation that it does portion retired immoderate of nan nuance and discourse of his April 25, 1987 “Radio Address to nan Nation connected Free and Fair Trade.” 

As Reagan emphasized successful his address, he supported free trade, advocating for bilateral reductions successful waste and acquisition restrictions wherever he could and unilateral reductions wherever he could not.  It is existent that nether his watch, and to a awesome grade astatine his discretion, nan US did enforce tariffs and different waste and acquisition restrictions. This has caused scholars for illustration Sheldon Richman, past astatine nan Cato Institute, to mention to Reagan arsenic “the astir protectionist president since Herbert Hoover,” Victor Davis Hanson, successful 2017 to qualify nan actions of President Trump during his first word arsenic “a return to, aliases a refinement of, Reagan’s and nan elder Bush’s opinionated realism: nan acceptance that nan United States has to protect its friends and deter its enemies,” and New Right thinkers for illustration Oren Cass to declare Reagan arsenic a “trade protectionist” who “basically started a waste and acquisition warfare pinch Japan,” holding him up arsenic a paragon of “trade restrictions done right.”

In doing so, however, these scholars uncover that they person fundamentally missed nan wood for nan trees. Ironically, they are nan ones misrepresenting Reagan’s thoughts connected world trade, not nan Canadians.

To understand why, we request to admit the context wrong which Reagan took agency successful 1981.  The US system was successful a deep economical downturn, pinch precocious inflation, rising liking rates, and an wide anemic system still trying to retrieve from nan 1980 recession. If location was immoderate manufacture that was wounded nan astir by this, it was nan American car manufacture and its national workers, who were wounded not conscionable by nan recession, but by nan presence of cheaper, much fuel-efficient, and higher value Japanese cars.

Faced pinch mounting pressures not conscionable from nan home automakers and their unions, but besides a protectionist (and Democrat) Congress poised to enact sweeping protectionist legislation, Reagan had a difficult prime earlier him.  In his autobiography, he writes, “Although I intended to veto immoderate measure Congress mightiness walk imposing quotas connected Japanese cars, I realized nan problem wouldn’t spell distant moreover if I did.” “The problem” Reagan referred to present was not “Japanese imported cars.” It was nan request for protectionist measures from Congress and nan national autoworkers.  

Reagan understood that vetoing immoderate protectionist bills that Congress sent him would only forestall nan inevitable and usage up valuable governmental superior successful nan process.  He understood, however, that he needed to do something, truthful he established nan Auto Task Force.  At a meeting, Vice President George H.W. Bush reportedly said, “We’re each for free enterprise, but would immoderate of america find responsibility if Japan announced without immoderate petition from america that they were going to voluntarily trim their export of autos to America?” Thus, nan thought of voluntary export restraint was born.  Reagan dispatched his waste and acquisition representative, Bill Brock, to thief pinch discussions.  

This led to a gathering successful nan Oval Office connected March 24th, 1981 pinch nan Japanese overseas minister, where, successful Reagan’s words, “I told him that our Republican management firmly opposed import quotas but that beardown sentiment was building successful Congress among Democrats to enforce them. ‘I don’t cognize if I’ll beryllium capable to extremity them,’ I said. ‘But I deliberation if you voluntarily group a limit connected your automobile exports to this country, it would astir apt caput disconnected nan bills pending successful Congress and location wouldn’t beryllium immoderate mandatory quotas.’” In a connection fixed by then-Vice President Bush connected April 8, 1981, he said that nan White House is not “suggesting to nan Japanese what they should voluntarily do” and that “[The management wants] to debar starting down that slippery slope of protectionism.” 

In nan end, Japan agreed to voluntarily restrict their exports to nan United States, initially for a play of 3 years, though this was extended respective times earlier yet being lifted successful 1994.

One mightiness reason that what Reagan was really doing was strong-arming Japan into reducing their exports by threatening nan state pinch thing worse if it did not comply.  This is revisionist history astatine its finest.  Reagan understood that prime is betwixt existent options, not imagined ones.  By preventing Congress from passing a protectionist import quota, Reagan had deliberately chosen nan slightest protectionist action of nan existent options earlier him, arsenic David Henderson (a personnel of Reagan’s Council of Economic Advisors) notes. Reagan was committed not to protectionism, but to preventing protectionism precisely because, arsenic he notes successful his now-even-more-famous Radio Address, “over nan agelong tally specified waste and acquisition barriers wounded each American worker and consumer.”

Another illustration is Reagan’s 1987 imposition of tariffs to extremity nan Japanese from dumping semiconductors into nan US market, which was nan juncture of nan power reside that nan Canadian advertisement drew from. But moreover successful this instance, Reagan attempted to usage tariffs arsenic a scaffold, not arsenic a sledgehammer. Reagan accused Japan of violating their statement successful nan US-Japan semiconductor waste and acquisition statement and placed a 100 percent tariff connected circumstantial equipment to limit nan adverse effects connected American consumers. These targeted tariffs were utilized arsenic a past resort, aimed astatine forcing compliance pinch an existing waste and acquisition deal. As they started to person their intended effect, Reagan was capable to trim them, first successful June of 1987 (two months aft they were imposed) and past again successful November (six months aft they were imposed); they were eliminated entirely successful 1991. Still, nan tariffs harmed US consumers and did small to amended US business competitiveness. The usage of tariffs to unit a state to grant its erstwhile obligations was a vulnerable tactic, and Reagan was profoundly alert of nan consequences if nan Japanese responded successful kind. The fortieth president understood that waste and acquisition wars wounded everyone progressive and free waste and acquisition was nan ideal. The waste and acquisition principles and policies of President Trump — easy nan astir protectionist president since Herbert Hoover — couldn’t beryllium further from Reagan’s. Trump is imposing monolithic and sweeping tariffs connected our allies, whereas Reagan bemoaned targeted tariffs to unit compliance pinch an existing waste and acquisition deal. 

We tin statement whether Reagan compromised his principles erstwhile he supported measures for illustration voluntary export restraints aliases semiconductor tariffs. But we cannot honestly statement what those principles were. As Reagan himself said, “imposing specified tariffs aliases waste and acquisition barriers and restrictions of immoderate benignant are steps [he is] loath to take.”

Reagan was a free-trade advocator done and through. As America revisits waste and acquisition argumentation successful 2025, we should retrieve his existent bequest — utilizing each instrumentality disposable to sphere and grow free trade, not to wantonness it.