How Protectionism Turns Friends into Rivals

For years, free trade’s critics have been at pains to refute an assertion that no one in their right mind has put forward: the idea that international commerce is a surefire recipe for peace. It is not and never was. Any serious free trader would tell you as much.

So let’s retire this straw man. The honest liberal claim about doux commerce has always been the modest one: trade makes belligerent conflict less likely. When two countries do business, war becomes more expensive for both. If war erupts, investments will become stranded, supply chains will be broken, customers will be lost, and uncertainty will intensify. To avoid these economic difficulties, exporters lobby their own governments to keep the peace. And today – with so many imports being inputs used in domestic production – importers join exporters in this lobbying effort.

The doux commerce effect is real.

Here’s the part protectionists will have to deal with eventually. You don’t need the strong version of the doux commerce thesis to see that if you value peace, protectionism isn’t the way to. The recent revival of protectionism is building hostility between nations who were once our closest, friendly trading partners.

For months now the president has used his tariffs in the both the conventional protectionist way but also as an instrument of geopolitical coercion. This hasn’t just imposed costs on American consumers and the producers who import their inputs while propping up select industries. It has also imposed a steep political cost. Tariffs are an invitation to grievance. They turn ordinary commercial spats into matters of national pride, contest over sovereignty, and hand belligerent politicians abroad a reason to make an example of us. Every trade deficit gets reframed as a robbery, every international transaction as a con, when in fact a U.S. trade deficit is just foreigners investing heavily in the U.S. (i.e. a capital-account surplus). Nobody is being shortchanged; both parties walk away with something of greater value. That is the point of the transaction. But if you treat every partner as a mark to be wrung out and reduce everything to a ledger, as president Trump and his acolytes have done, you forfeit more than efficiency. You lose the goodwill that has been the unquantifiable asset prompting other nations to invest in our firms and adopt our ways.

Worse, sustained conflict among allies weakens the credibility and cohesion of the Western alliance, creating openings for China and Russia and increasing the risk of miscalculation. The danger is not that tariffs will themselves cause a war with Denmark, but that coercing friends will fracture the alliances meant to deter wars with actual adversaries.

Consider Canada, a country posing no plausible military threat to the United States. It shares the world’s longest peaceful border with us, and its friendship with Americans was safely taken for granted for generations. Yet in a few months, the Trump administration’s tariff policy has managed to get Canadians booing our national anthem, pulling American bourbon off store shelves, canceling their American vacations, and cutting cross-border travel by roughly a quarter. As it is today, Ottawa is deliberately learning how to depend on us less, including by unwisely turning to China. And Canada’s new government intentionally and in reaction to Trump’s policies “took an historic step” to deepen its security ties with Europe and started shopping elsewhere for the weapons it used to buy from us.

Across the Atlantic, the same worldview produces the same result. European governments, never shy about complaining, especially when a Republican president is in office, have moved past complaining into something more durable: the settled conviction that the United States might not be a reliable partner. When Washington wanted airspace and bases for operations against Iran, several European governments initially said no. “Strategic autonomy,” once dismissed as French vanity, is now a serious continental project: buy fewer American weapons, build domestic defense capacity, reduce exposure to American pressure. Trump complains that our allies lean on us too heavily and then hands them every reason to stop. He might well get his wish, and he will not like it.

Obviously, Europe and Canada still cooperate with the U.S., but this cooperation seems to be born of necessity rather than any warm feeling. They oblige because they are as yet without an alternative to American military might. Some would say their own poor domestic policies will see to it that they never build one. Still, to rest a friendship on such an unstable footing is dangerous.

It was never the case that free trade was guaranteed to stave off war, though critics were ever ready to leap from the fact that commerce cannot stop every dispute to the absurdity that it does nothing of the sort. Protectionism is now lending credence to the doux commerce thesis from the other direction. It may not be sending armies over the border, but it is already sowing the mistrust and the drive for independence that are the prelude to them, among nations that had good reason to be our friends before the recent wave of American protectionism set in.