Trump administration recognizes the failure of tariffs

The White House’s retreat from rising food prices is more than pragmatism — it’s a bitter recognition that protectionism is costly

The news that Donald Trump’s White House is considering reducing tariffs on food to contain rising prices is, above all, a tacit admission of a blunder. It is the recognition, albeit veiled, that an economic policy based on aggressive commercial nationalism and isolation has a real and painful cost: the ordinary citizen’s plate of food. The measure, presented as a relief for Americans’ pockets, is in fact a patch on a flawed strategy, a course correction forced by popular pressure and electoral defeats.

The narrative constructed by the Trump administration is that of a pragmatic government, agile to “adjust” course when necessary, as economic advisor Kevin Hassett said. However, this occasional pragmatism cannot hide the origin of the problem. It was the government itself that, in August, imposed the broadest tariffs since the Second World War, increasing the cost of importing a colossal range of products.

The promise was to strengthen national industry and rebalance commercial relations. The result, predictable for any economist who looks beyond the dogma, was the transfer of costs to the consumer, inflating precisely the most sensitive items in the family budget: food.

Now, when the electoral consequences knock on the door after defeats in municipalities and states, the government is rushing to design a way out. The irony is bitter: the same White House that erected trade barriers as a dogma now finds itself forced to partially tear them down to avoid popular discontent. It is a confession that the trade war, far from being a positive-sum game, has created concrete losers at home.

The narrative contortionism is evident. On the one hand, Hassett tries to blame Biden’s legacy for the absolute level of prices, an argument that, even with its grain of truth, solemnly ignores the impact of tariffs current about inflation gift.

On the other hand, the announcement of a “dividend” of US$2,000 from tariff collections sounds like an electoral and economically naive palliative. It’s giving back with one hand a crumb of what was taken with both, through higher prices in the supermarket.

It is a policy of welfare financed by a disguised regressive tax, which penalizes precisely the poorest, who spend a greater proportion of their income on essential goods.

From a progressive lens, this episode is a case study in the dangers of an economic policy that privileges nationalist rhetoric over the material well-being of the population. The obsession with tariffs as a tool of geopolitical power has backfired, eroding household purchasing power and forcing the government to retreat to contain the very inflationary rage it helped create.

The possible reduction of food tariffs is, therefore, a victory of necessity over ideology. But it is a small and late victory. It does not redeem an erratic and harmful trade policy; it just exposes it as such.

It reveals an administration that acts by reaction, not by planning, and which only bows to the evidence of facts when they translate into defeats at the polls.

For families who have been facing the most expensive supermarket bill for months, the change is welcome, but the lesson is clear: protectionist adventures, no matter how much they are packaged in speeches of national greatness, have a price. And whoever pays the bill is always the same.

With information from Financial Times*