The New Yorker:

Robert Lighthizer, the former U.S. Trade Representative, lost his bid to rejoin the White House, but he still believes the President’s protectionist instincts can jump-start American manufacturing.

By Benjamin Wallace-Wells

One way in which Donald Trump has already imposed his fixations on the American public is that tariffs are suddenly a major political topic. During the wintry interregnum between the election and his Inauguration, Trump responded to a Washington Post report that he intended to create a new tariff of ten per cent on many foreign goods entering the U.S., a prospect that would upend the global system of trade, by clarifying that his actual plans would cover all foreign goods. He then spent the first hours of his Administration promising to impose twenty-five-per-cent tariffs on goods from Mexico and Canada by February 1st and insisting he would establish an “External Revenue Service” to collect tariffs and “other foreign trade-related revenues.” Suddenly, there is a subgenre of financial news in which bankers coolly assign probabilities to immense changes to the supply chain and adjust valuations accordingly, and executives of companies that depend upon parts from abroad emerge to issue special pleadings. “Everyone’s got a pretty big case of anxiety here,” Steven Center, the head of Kia’s U.S. operations, told the Wall Street Journal. “In two words: Please don’t.”

But, if the new tariff regime has been hyper-publicized, it has also been somewhat undertheorized. If the plan is to disrupt the existing regime, in the conviction that global free trade has undermined American interests and workers, what is meant to replace it? Because virtually no mainstream economists think that universal tariffs are a good idea, there is no off-the-shelf policy model to adopt. Complicating the situation is that Trump’s nominee for Treasury Secretary, Scott Bessent, has tried to reassure Wall Street that the President’s tariff threats are merely a negotiating tactic. “My general view is that at the end of the day, he’s a free trader,” Bessent told the Financial Times this fall. “It’s escalate to de-escalate.”

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