Ambassador Jamieson Greer published an article in the June issue of the International Monetary Fund’s Finance & Development Magazine calling for the economics profession to revisit its assumptions and develop models that capture what matters to the real economy—including distributional consequences of trade, labor market dynamics, network and scale effects in manufacturing, effects of regulatory arbitrage on workers and producers, impacts of detailed rules of origin on global production networks, and public health outcomes. If we want smarter policy, we need richer empirical tools that study how trade actually works.

For roughly 30 years, tariffs and import regulation were policy pariahs. To paraphrase English writer G.K. Chesterton’s quip about Christianity: Tariffs were not tried and found wanting but rejected by au courant economic models and left untried. Policymakers, scared of challenging the elite consensus derived from such models, closed off the universe of options and strategies to solve America’s challenges. But President Donald Trump has changed that and, in doing so, given a gift to economists. The return of tariffs and import regulations creates an opportunity to update old assumptions and dated models with the hard evidence of real-world data and experience.

It is interesting that these policies ever became off-limits. The architects of the post–World War II international economic system knew the risks of unrestricted trade, such as significant trade imbalances or dangerous import dependencies. These architects prioritized national sovereignty and security as equal goals alongside broad-based prosperity. The General Agreement on Tariffs and Trade was deliberately negotiated to allow robust use of tariffs to ensure essential security, prevent damage to domestic industries, respond to unfair competition, foster economic development, and address balance of payments challenges. The Coordinating Committee for Multilateral Export Controls aligned export control policies across the United States and its allies to present a common economic front against the Soviet Union and its satellites. Plurilateral agreements, such as the International Tin Agreement, actively managed trade in key commodities to safeguard supply chains.

Read the article.