Trump: A Latter Day Mercantilist

Written on 09 April 2025.

For Trump and his allies, what’s happening now is necessary “medicine.” Trump views global trade in zero-sum terms: He appears to think trade deficits are a sign of American weakness (rather than, say, a reflection of the power of the U.S. consumer). He believes U.S. purchases of foreign goods are “subsidies” to other countries with money that should be spent at home. And he sees tariffs as a tool to raise funds and bring back manufacturing to the hollowed-out industrial heartlands of the United States.

Since the 19th century, an economic policy geared towards current account surpluses and protectionist employment stabilization has been referred to as neo-mercantilism.

Mercantilism promotes government regulation of a nation's economy for the purpose of augmenting and bolstering state power at the expense of rival national powers. High tariffs, especially on manufactured goods, were almost universally a feature of mercantilist policy.^[2] Before it fell into decline, mercantilism was dominant in modernized parts of Europe and some areas in Africa from the 16th to the 19th centuries, a period of proto-industrialization.^[3] Some commentators argue that it is still practised in the economies of industrializing countries^[4] in the form of economic interventionism.^{[5][6][7][8][9]}

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