Trade Is Broken, and I Know How to Fix It

The international trading system has failed America and many other countries around the world. No one has done more than President Trump to bring attention to this broad failure.

By imposing tariffs on China (and threatening to impose them on Mexico and Canada), he has taken an immediate measure that is driven by an urgent national security issue — the fentanyl crisis, which is killing thousands of our citizens every month.

But using tariffs as leverage on security matters should not be confused with the fundamental fact that the global trading system has failed our country. It has not faltered because free trade doesn’t work. It has failed because free trade doesn’t exist.

What brought down the postwar trading order was the rise in many countries of pernicious industrial policies. In this drama, those with continuous, large trade surpluses are the real villains.

China, which recently announced a nearly $1 trillion trade surplus for 2024, has demolished the system. But it is not China alone: Other chronic surplus-trade countries, such as Germany and Vietnam, have also adopted policies across their economies intended to shift resources from their consumers to their manufacturing sector to increase exports.

The innocent parties are countries like the United States and Britain that have consistently run sizable trade deficits. Policies that produce large deficits, even if they include tariffs, are not protectionist. They are the opposite.