Tariffs won’t make America great again: Export-Import Bank former chairman and president

In the rush toward what President Trump thinks of as a more realistic and transactional world of dealmaking in diplomacy, he has lost sight of the strategic advantages free trade continues to provide the U.S. While it remains to be seen whether these on-again, off-again tariffs will last, lasting damage has already been done. 

As Trump doubles down on his "America First" rhetoric, he is, at best, ignoring the most crucial fact about the American economy: It runs on trade, that is Americans buying imported goods and American companies exporting to the rest of the world. The United States is the number two exporter in the world, which means that retaliatory tariffs will cause tremendous harm to American businesses and farmers and their workers. Our economy is powered not just by physical goods crossing borders, but by a vast service sector that relies on cooperation with other countries. By instigating a trade war against our geographical neighbors, closest allies, and economic partners, Trump risks stopping the engine of American prosperity.

We're already seeing the consequences of this unpredictable environment play out with our northern neighbor. Canada—historically our closest ally and trading partners—is now being treated like an economic adversary. The result? Disruption to the deeply integrated economies and value chains on both sides of the border. 

Take the automotive industry, a cornerstone of North American manufacturing, which stands to suffer significantly. Vehicles and components frequently cross the Canada-Mexico-U.S. border multiple times during production, with supply chains carefully optimized over decades. A 25% tariff could inflate the price of a new vehicle by as much as $12,000. This not only hurts American consumers, but also puts thousands of jobs at risk. 

NAFTA, the predecessor to the United States-Mexico-Canada agreement, was originally proposed by Trump’s political idol Ronald Reagan, who correctly thought the U.S. needed a way to compete with an integrated European market. One of NAFTA’s follow-on effects has been allowing U.S. companies to compete with Asian automakers. By abandoning free trade, we abandon these long-term advantages, with no new strategic advantages to replace them, only Trump’s vague promises of a slate of better bi-lateral deals. As the car industry may go, so other industries may follow.  

Beyond manufacturing, Trump’s tariffs will hurt a range of industries, from agriculture to technology. American farmers, already struggling with challenging market conditions, now face the prospect of losing access to crucial export markets. Meanwhile, innovative tech companies may find themselves cut off from global talent pools and collaborative research opportunities.

Trump has said he wants to make the U.S. more open to foreign direct investment (FDI). The bitter irony is that the chaos caused by his proposed tariffs is likely to discourage it. As Dave Cote once famously said, “capital is a coward,” meaning that investment always flows toward safety and predictability. Faced with Trump’s chaos and unpredictability, other nations looking to do business in North America may now choose to locate elsewhere, taking jobs and economic growth with them. 

The near daily drama on proposed tariffs also distracts voters and policymakers from more effective ways to boost American competitiveness. Instead of erecting trade barriers, we should be investing in education, infrastructure, and research and development. These are the undisputed foundations of long-term economic growth and innovation—areas where America has historically excelled.

Treasury Secretary Scott Bessent’s recent comment that “access to cheap goods is not the essence of the American dream” entirely misses the point of free trade. So-called cheap goods are no trivial thing. Lower prices for food, clothing, and other essentials have alleviated economic pressure on American families for decades, and they have raised our collective standard of living and for many years helped keep inflation in check. That is, in fact, the essence of the American dream. Putting America first should mean having trade policies that consider the real interests of U.S. consumers, and not allegiance to an unproven, extreme ideology of purely transactional trade and diplomacy.

Instead, we should redefine what "America First" should really mean: fostering fair and transparent relationships, investing in our workforce and infrastructure, doubling down on innovation, and using trade to deepen our relationships with those long-standing allies in Europe and East Asia who share our values. When we build bridges to our allies, not walls, everyone stands to benefit.

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