Reagan vs. Trump on Tariffs

The Gipper was a free trader, no matter what the current President says

WSJ editorial. Excerpts:

"Mr. Trump is wrong about the Reagan speech, and he was wrong when he said on social media that “Ronald Reagan LOVED tariffs for purposes of National Security and the Economy.” The Gipper was a free trader. In the 1987 speech, Reagan was trying to explain why he was making an exception to his free-trade policies on semiconductor imports from Japan.

We remember that speech well, and its purpose was to head off a protectionist surge in Congress. The Gipper delivered it as fear of Japanese economic dominance was reaching its political peak in the U.S. “Japan as Number One” was the title of a popular, and misguided, book of the time.

Democrats in Congress, led by soon-to-be presidential candidate Dick Gephardt, were threatening new tariffs. Reagan wanted to instruct the country about the damage from protectionism in the past, especially from the Smoot-Hawley tariff of 1930 and how it contributed to the Great Depression."

"Reagan’s semiconductor tariffs proved to be a mistake. Intel Corp., which lobbied for the tariffs, innovated with its 386 and 486 chips that surpassed the commodity memory chips made by Japan. The U.S. attempt at computer-chip industrial policy at the time, focused around the Sematech consortium, was a bust, as T.J. Rodgers, the former CEO of Cypress Semiconductor, has explained on these pages."

"Anyone who reads the whole speech can see the Gipper favored free trade, with rare exceptions for political pragmatism and national security. Reagan also backed, long before Nafta, a North American free-trade area."