The Trump administration’s rollout of its tariff strategy on “Liberation Day,” April 2, was a debacle of historic proportions, causing the greatest stock market crash since the COVID-19 pandemic and the threat of an even more frightening flight from the dollar as a safe asset. Nevertheless, from the wreckage some useful policies might be salvaged. After all, the central initiative of President Franklin D. Roosevelt’s New Deal in his first term, the National Recovery Administration, collapsed in chaos and confusion even before the Supreme Court ruled it unconstitutional in 1935. But elements of the NRA’s grand scheme were re-created by the Social Security Act of 1935 and the minimum wage established in 1938 by the Fair Labor Standards Act. In the same way, some of the components of the Clinton administration’s failed effort at comprehensive health-care reform, the proposed Health Security Act of 1993 (“Hillarycare”), were repurposed and included in the more modest and successful Affordable Care Act of 2010 (“Obamacare”).

In sifting through the rubble of Liberation Day, in search of useful policies, we can distinguish among tariff policies that are good (sector-specific tariffs and country-specific tariffs), bad (“reciprocal tariffs” which are not really reciprocal), and ugly (the global or universal tariff).

Let’s begin with sector-specific tariffs. With the exception of libertarian ideologues, thoughtful Americans, right, left, and center, recognize the need for protection and some promotion for manufacturing supply chains critical to national defense and independence. In 1791, in his Report on Manufactures for Congress, America’s first Treasury secretary, Alexander Hamilton, stressed the need for promoting American manufacturing industries that would allow the United States to be “independent of foreign nations for military and other essential supplies.” The emergence of China as a superpower rival on all fronts—military, industrial, commercial, and diplomatic—makes the need for a high degree of American industrial independence as urgent in the 21st century as it was in earlier eras.

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