President Trump has dubbed 2 April, when his new tariffs go into effect, “Liberation Day”. While many investors, financial analysts, and consumers are in panic mode, Trump’s pitch to the industrial working class remains blunt: over the last half century, America cashiered its once unrivalled manufacturing base and high-wage jobs in exchange for a surfeit of foreign goods, leaving it exploited by free-riding allies and geopolitical rivals alike.
His solution is equally blunt. He and his advisers insist that aggressive, universal tariffs, combined with deregulation and corporate tax cuts, will render cross-border supply chains less lucrative and domestic investment attractive for business.
The problem is that virtually every other Trump action since Inauguration Day has undercut the state capacity needed to rehabilitate core industries and shepherd capital and labour towards new ones. Instead of leveraging state power on behalf of massive public-private projects, research and development, and workforce training, Team Trump has subjected government agencies to DOGE’s ruthless budget cuts, and frozen funds from or threatened to terminate President Joe Biden’s flagship industrial policies.
The Trumpians are plotting to privatise a host of government services, and have sent a chill through research institutes vital to breakthroughs in advanced medicine, technology, and manufacturing. Meanwhile, the administration has largely crippled antitrust enforcement, thereby favouring powerful monopolies that can withstand or circumvent trade barriers over mechanisms to coax healthy domestic competition and investment.
None of these actions furthers the purported aims of tariffs and targeted export controls: to create good jobs for the forgotten working class and turn depressed regions into desirable places in which to work and live. On the contrary, slashing and burning state capacity will hinder these goals. Most damningly, the Hamiltonian tradition the Trumpians claim to champion is a powerful witness against the belief that a crippled state can boost manufacturing.
These shortcomings haven’t stopped some of Trump’s most vehement critics on the labour Left, not least United Auto Workers President Shawn Fain, from conceding that he is partly right on trade. The bipartisan Washington establishment of the late 20th century made a colossal mistake in offshoring millions of jobs on the naive assumption that high-tech innovation and services would replace manufacturing, the historic engine of American upward mobility and growth.
But despite being motivated by fear over China’s phenomenal rise, Trump’s strategy has proved mostly incoherent, not to say contradictory, sowing serious doubts over whether America, after decades of outsourcing and regulatory capture by major multinationals, has the institutional know-how to meet the new president’s promise of industrial renewal.
“Trump’s approach … betrays the legacy of the GOP statesmen whom champions of his tariffs regularly invoke.”
Trump’s approach isn’t merely myopic, though — it betrays the legacy of the GOP statesmen whom champions of his tariffs regularly invoke to defend the current administration.
The populist Right’s evangelism for Trump’s protectionist impulses has long rested on the notion that he is boldly reviving the “American System” school of economics. This tradition stretches from Alexander Hamilton in the founding era and Henry Clay in the early republic to the heterodox economist Henry Charles Carey, the influential lawmaker Justin S. Morrill (architect of Civil War-era tariffs), and Presidents William McKinley and Theodore Roosevelt. These Republican statesmen and thinkers espoused a doctrine of development premised on diversified manufacturing, vast energy sources, scientific progress, and spreading education in the “industrial arts”.
Scholars describe this doctrine as unabashedly mercantilist. Yet 19th-century Republicans maintained that it furthered the country’s founding ideals of self-government and associationalism: the notion that an industrious, republican citizenry will form voluntary organisations conducive to promoting shared interests that transcend divisions by region, sector, or class.
Neither laissez-faire nor statist, the old GOP that supposedly inspires Trump fused support for large developmental goals from disparate parts of society — inventors, aspiring industrial magnates, prospectors, advocates of “scientific agriculture”, financiers, and tradesmen. The intent was to spread commercial hubs built on regional interdependence, raising manufacturing and agricultural output while also curbing demand for goods from competitors like Victorian Britain.
Tariffs underpinned this system by pushing farmers, merchants, and consumers to purchase US-made goods and support local industries. Post-Civil War, tariffs underwrote pensions for Union Army veterans and their families (then a huge constituency of the GOP). Tariffs were also meant to lessen the competitiveness of imports made by foreign “pauper” labour, attracting the support of skilled workers who had few other avenues to stable wages.
Like Trump, the Republican leaders of a distant epoch believed high tariffs were a means to building national wealth and power. And their aversion to foreign competition ran deep. Cheap foreign goods were, in modern parlance, the real source of “market distortions”, because, unchecked, they made profitable manufacturing less viable and threatened the livelihoods of skilled workers.
Even Republican reformers who, like Theodore Roosevelt, were more attuned to the daily needs of thrifty households and worried that tariffs had given rise to unaccountable monopolies tended to believe that free trade was decadent. On the verge of America becoming a world power, Roosevelt remarked that “pernicious indulgence in the doctrine of free trade seems inevitably to produce fatty degeneration of the moral fibre”. Trump’s Treasury secretary, Scott Bessent, was channeling the same sentiment when he asserted in a recent speech that “access to cheap goods is not the essence of the American Dream”.
But this is where the similarities end. In fact, depicting Trump as a descendant of the old protectionist pedigree misses an important dimension of past Republican thought. From the Lincoln era to Eisenhower’s, Republicans deployed a range of policies besides tariffs to stoke development and progress. The party’s Trumpian incarnation entirely ignores these other strategies, when it doesn’t undermine them.
Take the legacy of Morrill, the lawmaker who, in addition to protective tariffs, authored the legislation that created America’s exemplary land-grant colleges. Morrill well understood the relationship between education in fields like agronomy and engineering and productive innovation. The Homestead Act from the same period, which distributed public lands to frontier homesteaders for a nominal fee, likewise reflected the GOP’s belief in the importance of “decentralised” economic growth for a democratic society.
By contrast, Trump’s sweeping cuts to university grants, including for regional public universities that serve his rural base, disregard the country’s pressing skills shortage. Meanwhile, his lofty campaign pledge to build 10 “freedom cities”, still embryonic, evokes not so much the producer populism of westward expansion, but the dystopian “startup societies” dreamt up by Silicon Valley — or a Middle Eastern petrostate.
The administration’s axiomatic contempt for regulation is also not in keeping with the GOP’s historical view. Reductive histories portray the GOP as always preaching “small government”. But the party once had vigorous debates about the purpose and scope of regulation.
Despite occasionally assailing corporate malfeasance and grilling feckless CEOs in congressional hearings, today’s Right-wing populists have yet to match the Republican “insurgents” from the party’s Roosevelt wing, including the likes of Sens. Hiram Johnson and George Norris, who pushed for corporate regulation, public works, public utilities, and direct democracy, and took a stand against corruption. Though they were rarely “redistributive” in the social-democratic sense, such positions aimed to prevent abuses by the politically connected and to give working people a material stake in democracy.
Earlier Republicans were also quite experimental in their time. President Herbert Hoover, forever marked by his loss to Franklin Delano Roosevelt for failing to alleviate the Great Depression, was, during his earlier tenure as Commerce secretary, a consummate technocrat who sought to deepen cooperation between various government bureaus and business associations to make policymaking more scientific.
In stark contrast to DOGE’s modus operandi, Hoover’s efforts to reorganise government were founded on a belief in expertise and the legitimacy of using regulation to make markets more rational; the development of America’s burgeoning aviation sector, improvements in radio technology, and national business standards for product sizes were among his achievements.
Hoover was hardly a central planner. Judged by the current GOP’s ethos, though, his record of bureaucratic oversight epitomised the growth of the modern administrative state.
Of course, the New Deal realignment, which hobbled the GOP’s support for a generation, cemented the popular view that Republicans regularly opposed active government. But until the Reagan era, most mainstream Republicans accepted the New Deal order, occasionally endorsed breaking up monopolies, and eagerly supported generous federal funding for science and technology, even as they ritually affirmed the principle of “free enterprise”.
Most famously, the Eisenhower administration’s vast Interstate Highway System updated Republicans’ past support for “internal improvements” for the Cold War era, further propelling the rise in suburban homeownership that characterised the postwar boom. And progressives’ arch-bogeyman Richard Nixon, now frequently regarded as the last “New Deal president”, signed NEPA and OSHA, the country’s landmark laws, respectively, for environmental protection and workplace-safety standards.
In short, major players in the Republican Party adopted a more flexible and interventionist view of political economy than is commonly recognised. Most MAGA influencers today would no doubt dismiss such evidence as not reflecting “true” Republicanism. Partisan progressives would similarly concur, at most allowing that “progressive Republicans” are extinct because the Democratic Party became their natural home.
This is to be expected. A few conservative think tanks and public intellectuals have sought to create a genuinely “pro-development” and “pro-worker” agenda for Republicans. But the anti-government tirades of Newt Gingrich, anti-tax activist Grover Norquist, and their successors in the Tea Party movement did much to fix the partisan battle lines of the last few decades, few of which the MAGA movement has redrawn besides disavowing George W. Bush’s embrace of globalised trade.
Trump’s GOP is thus fixated on slashing and burning its way through the state, rather than restoring faith in positive government. For a little while, even sceptics allowed that a new working-class base, plus rising tensions with Beijing, might push Republicans to embrace an industrial strategy that recovered some of their party’s authentic traditions of domestic progress.
That possibility has come to naught. While Trump proclaims “liberation” is imminent, the rapid loss of state capacity under his watch promises anything but. Tariffs excepted, there is little concrete government action to compel market forces to meet national economic objectives, and the GOP has bent over backwards to accommodate banking lobbies vociferously opposed to even minor restraints on financial predation.
One hardly needs to be a radical populist to see this doesn’t bode well for American society. As the most perceptive believers in the “American System” understood, an economy that fails to maximise its productive forces and promote workers’ well-being is destined to wither. If America is to avert permanent decline, it needs leaders determined to prevent the spread of servitude masked as “liberty”.
