{"id":2420435,"date":"2025-05-14T02:00:00","date_gmt":"2025-05-14T06:00:00","guid":{"rendered":"https:\/\/monetizemail.com\/magatoon\/?p=2420435"},"modified":"2025-05-14T06:53:52","modified_gmt":"2025-05-14T10:53:52","slug":"was-reagan-a-protectionist","status":"publish","type":"post","link":"https:\/\/monetizemail.com\/magatoon\/2025\/05\/14\/was-reagan-a-protectionist\/","title":{"rendered":"Was Reagan a Protectionist?"},"content":{"rendered":"

Ronald Reagan is, famously, known for being a free trader<\/a>, a globalist perhaps, in today\u2019s parlance.\u00a0 He believed very firmly in the importance of American industry but also believed that American industry was best served by lowering our barriers to trade, not by erecting new ones through protectionist policies. A cornucopia of evidence has borne out exactly one thing: he was correct.<\/p>\n

But still, for all his speeches<\/a> and conviction on free trade, Reagan famously compromised in one, major way: Japanese automobiles. Reagan recounted the dilemma he faced in his autobiography<\/a>:\u00a0<\/p>\n

\n

Although I intended to veto any bill Congress might pass imposing quotas on Japanese cars, I realized the problem wouldn\u2019t go away even if I did. The genuine suffering of American workers and their families made this issue intensely charged politically. And the protectionists in Congress had some powerful ammunition on their side: there was plenty of evidence that the Japanese weren\u2019t playing fair in the trade arena. They refused to let American farmers sell many US agricultural products in Japan, and they imposed subtle but effective barriers that eliminated many of our other products from the Japanese marketplace: American cigarette companies, for example, could advertise their products only<\/em> in English in Japan.<\/p>\n<\/blockquote>\n

New Right thinkers like Oren Cass<\/a> have pointed this out numerous times, calling Reagan a \u201cprotectionist\u201d and holding this example up as a paragon of the incredible benefit of protectionism done right<\/a>.\u00a0 He is not alone in this. In 1988, Sheldon Richman<\/a>, then at The Cato Institute, called Reagan, \u201cthe most protectionist president since Herbert Hoover, the heavyweight champion of protectionists.\u201d In 2017, Victor Davis Hanson<\/a> referred to the actions of President Trump during his first term as \u201ca return to, or a refinement of, Reagan\u2019s and the elder Bush\u2019s principled realism: the acceptance that the United States has to protect its friends and deter its enemies.\u201d<\/p>\n

However, in doing so, these people fundamentally miss the forest for the trees.\u00a0 They look only at the actions of the man without understanding the context within which they took place and the actual (as opposed to the imagined<\/em>) choices that Reagan and his team faced.<\/p>\n

Understanding Context<\/h2>\n

When Reagan took office in 1981, the US economy was in the throes of one of the most severe economic downturns since WWII<\/a>, characterized by high inflation, rising interest rates which peaked at an incredible 20%, and an overall weak economy still reeling from the 1980 recession. Particularly hurt by all of this were US automakers and their union workers, especially as we consider that this was also a time where cheaper, Japanese made cars began flooding the US market.<\/p>\n

Faced with pressures from domestic automakers, the unions, and a protectionist Congress demanding that the administration \u201cdo something,\u201d Reagan established an Auto Task Force<\/a> to come up with a solution that allowed him to remain committed to free enterprise and avoid import quotas. In a statement given on April 8, 1981, then-Vice President Bush announced<\/a>, that the White House is not \u201csuggesting to the Japanese what they should voluntarily do\u201d and that \u201c[The administration wants] to avoid starting down that slippery slope of protectionism.\u201d\u00a0<\/p>\n

The Japanese foreign minister was invited to the Oval Office on March 24 where in Reagan\u2019s words, \u201cI told him that our Republican administration firmly opposed import quotas but that strong sentiment was building in Congress among Democrats to impose them. \u2018I don\u2019t know if I\u2019ll be able to stop them,\u2019 I said. \u2018But I think if you voluntarily <\/em>set a limit on your automobile exports to this country, it would probably head off the bills pending in Congress and there wouldn\u2019t be any mandatory quotas.’\u201d\u00a0<\/p>\n

The result of these negotiations occurred \u201cwhen Japan announced it was going to voluntarily limit its exports of motor vehicles to this country to 1.68 million a year\u201d for 1981-1983. According to Reagan, Japan\u2019s \u201cpolicy paid off\u201d and ultimately \u201cdefused the momentum in Congress to impose quotas, which would have been the first shot of a serious international trade war\u201d (An American Life<\/em>, <\/em>274).<\/p>\n

Context in Reagan\u2019s decision matters.\u00a0 He saw that a protectionist bill was coming and that, even if he vetoed it, \u201cthe problem wouldn\u2019t go away.\u201d\u00a0 The problem here does not refer to \u201cJapanese cars\u201d but to the protectionist demands of Congress.\u00a0 Rather than let Congress have what it wanted, Reagan diffused the situation by asking Japan to take measures into their own hands.\u00a0 This demonstrates that not only was Reagan not <\/em>a protectionist, but that he actively sought alternative means to the US imposing protectionist policies. Japan\u2019s voluntary reduction in automobile exports should be considered a success precisely because it prevented<\/em> disastrous protectionist policies from going into effect, not because it was <\/em>protectionist.\u00a0<\/p>\n

One might argue that Reagan was strong-arming Japan into reducing their exports by pointing out that something worse would happen if Japan did not agree to limit their auto exports and that this is tantamount to \u201cpursuing protectionism.\u201d\u00a0 This is a revisionist version of history, carefully crafted to support an agenda.\u00a0 Reagan understood that choice is necessarily between actual<\/em> options, not imagined ones. By preventing Congress from passing a protectionist import quota, Reagan deliberately chose the least protectionist <\/em>option of the actual options available to him, as David Henderson \u2014 a member of Reagan\u2019s Council of Economic Advisors \u2014 notes<\/a>.<\/p>\n

Reagan vs. Trump<\/h2>\n

This stands in stark contrast to President Trump\u2019s approach, which is to actively seek increasing protectionism.\u00a0 Where Reagan inherited a struggling economy facing high inflation, rising interest rates, falling output, and weak job prospects, President Trump inherited an economy that was experiencing none of that.\u00a0 While there is a case to be made that the economy had been overheated by excessive government during the previous Administration, there were very few signs of anything in the private sector in need of massive correction in terms of macroeconomic policy.<\/p>\n

Despite this, however, President Trump used the The International Emergency Economic Powers Act<\/a> to formally become \u201cTariff Man<\/a>,\u201d ushering in a new era of American protectionism the likes of which we have not seen since the infamous (and disastrous) Smoot-Hawley tariffs<\/a>.<\/p>\n

The comparisons between Trump\u2019s actions and Reagan\u2019s belie a clear agenda: to try to borrow the well-deserved positive legacy of one of America\u2019s most cherished presidents to bolster support for Trump\u2019s disastrous trade policies.\u00a0 Reagan was no protectionist. But unlike so many, he could see the forest for the trees and knew that protectionism was very likely coming. Rather than stand idly by, he did what he did best: promoted free trade as best he could in the face of options that he actually faced.<\/p>\n

The post Was Reagan a Protectionist?<\/a> was first published by the American Institute for Economic Research (AIER)<\/a>, and is republished here with permission. Please support their efforts.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Ronald Reagan is, famously, known for being a free trader, a globalist perhaps, in today\u2019s parlance.\u00a0 He believed very firmly in the importance of American industry but also believed that American industry was best served by lowering our barriers to trade, not by erecting new ones through protectionist policies. A cornucopia of evidence has borne …<\/p>\n","protected":false},"author":586,"featured_media":2324418,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":["post-2420435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2420435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/users\/586"}],"replies":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/comments?post=2420435"}],"version-history":[{"count":1,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2420435\/revisions"}],"predecessor-version":[{"id":2420436,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2420435\/revisions\/2420436"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media\/2324418"}],"wp:attachment":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media?parent=2420435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/categories?post=2420435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/tags?post=2420435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}