The Economics Show Making sense of Trump's tariffs. With Dani Rodrik
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Feb 6, 2025 
In this discussion, Dani Rodrik, a Harvard professor and renowned expert on industrial policy, delves into the complexities of tariffs and their historical significance in global trade. He questions the rationale behind Trump's tariff policies, suggesting they may be superficial solutions. The conversation highlights the resurgence of industrial policy and the need for state intervention, especially in renewable energy. Rodrik urges a shift towards domestic innovation over international competition, reflecting on the broader political implications tied to economic policies.
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Trump's Senseless Tariffs
- Trump's tariffs, while seemingly aligned with Rodrik's earlier critiques of globalization, are deemed "senseless."
- They lack a coherent policy rationale, unlike strategic tariffs used in industrial policy.
Strategic Tariff Examples
- The EU uses tariffs like the Carbon Border Adjustment Mechanism (CBAM) to support green policies.
- East Asian countries historically used tariffs alongside broader industrial strategies, not as standalone solutions.
Resist Tariff Retaliation
- Countries should not retaliate against Trump's tariffs with their own.
- Instead, they should diversify trade partners and highlight the self-harm the US inflicts on itself.
