Opinion - What globalists get wrong about free trade
Since at least the advent of the COVID-19 pandemic, major media outlets have decried the impending end of globalization. These lamentations have only accelerated since the Trump administration declared April 2 'Liberation Day,' with our trading counterparties' unfair practices to be summarily addressed through increased and partially reciprocal duties (along with a minimum tariff level).
To hear the media tell it, such tariffs are the death knell for a beneficial global trading order and will immiserate billions. But such valedictories for the end of globalization advance a straw-man fiction about what is now supposedly lost: namely, that President Trump's policies contravene an agreed framework whereby goods, capital and labor move across national boundaries in a mostly unencumbered manner.
If one believes in the merits of free trade and cross-border capital flows, it is essential not to confuse the ideal with the real. In truth, there have always been (often significant) friction and costs associated with such movements.
Today's so-called free trade regime recalls Western support for Soviet communism, snarling 'real communism has never been tried' in defense of its myriad failures. Love it or hate it, what exists today is hardly real free trade.
If what we have today isn't it, what does free trade closer to its Platonic ideal look like? This notion, that trade conditions are rarely wholly free or unfree, also confuses the media.
The reality is that trading conditions sit uneasily along a continuum, and relatively free trade only occurs under certain conditions. These include (among others):
Mutually agreed-upon rules for international commerce, consistently applied or at least generally observed, allowing for relatively open and reciprocal market access;
Exemptions for strategic industries, a form of insurance for nations, insulating them from being caught short in a subsequent conflict with trading partners;
Reliable cross-border supply chains, allowing for the disaggregation of production into its constituent parts (trading resource control for cost efficiency) and
An ideologically unipolar historical moment, or a multi-polar world in which international trade largely occurs within the poles.
These and other trade-friendly conditions were largely obtained in the decades leading up to the First World War, and in the 20 or so years following the end of the Cold War. While a world war is an obvious culprit ending an earlier era of globalization, what explains its current travails?
A rules-based trading order can withstand certain restrictions (tariffs, regulations, quotas) — in fact, protecting strategic sectors demands some of them. But excessive use, along with outright cheating — subsidies, intellectual property theft and currency manipulation, as in the case of China — gives rise to a prisoner's dilemma with suboptimal outcomes.
Similarly, the extended supply chains that proliferated over the last 30 years assumed the only national interest that mattered was economic advancement.
Consider the terms made fashionable over the last three decades: 'a borderless world,' 'global citizens,' 'the end of history' and 'soft power.' The disaggregation of business models previously housed under a single corporate roof never anticipated revisionist challenges to Pax Americana, such as the retrograde gunboat diplomacy of China's Belt and Road Initiative, much less the rise of transnational terrorist organizations disrupting commerce and producing failed states.
Moreover, the unipolar moment has ended. As China, under the rule of the Communist Party, displaced the Soviet Union as our primary geopolitical adversary, its admission to the World Trade Organization in 2001 conferred upon it a degree of economic leverage over the United States that Joseph Stalin could only have dreamed of.
The return of history, with not only China but Russia, Turkey and others asserting spheres of influence and advancing parochial interests while embedded within a global economic system and multilateral institutions, further vitiates unfettered trade and capital movements.
Failing to understand that globalization — the mutually beneficial interdependence and integration among nations, entailing a largely unrestricted flow of goods, capital, information and people — only flourishes under certain conditions, is only half of what the media and establishment elites get wrong. The other is the fetishization of globalism as an ideology.
One can support globalization without being a globalist. Free trade and capital flows do not themselves comprise a belief system, but are rather a means to an end: actualizing individuals' aspirations and the nations that represent them.
Free trade is the handmaiden of liberty, not vice versa. Reifying trade at the expense of other liberal values risks perverse outcomes; offshoring a nation's pharmaceutical production capacity to potentially belligerent nations is but one example.
Another danger in globalism as an ideology is that of falling prey to historical determinism.
Seeing deepening global integration as inevitable presents several risks. Believing it impervious threatens underinvestment in its sustenance (see the collapse of the WTO's Doha Round); competing objectives such as national self-determination and defense of borders may also be subordinated to globalism's tenets, destabilizing the very nations seeking to benefit from globalization.
The proposed Trump tariff regime is not the full-throated attack on a functioning trading order critics make it out to be. To acknowledge this is not to defend blindly the administration's policies. Tariffs have their place as leverage against trading counterparties with onerous trade restrictions of their own. They are also useful to support strategic sectors in an increasingly dangerous world.
What tariffs won't do is revive a rust-belt economy, which isn't coming back. Comparative advantage, alas, remains undefeated. Nor should tariffs be sold to the public as a governmental revenue-generator while incumbent income, sales and other tax regimes remain firmly in place.
Globalization improves lives and should be promoted. Free trade and capital movements have consistently shown themselves, when the requisite conditions are present, to be mutually beneficial. How these benefits are distributed and whether the unchecked movement of people across borders is similarly beneficial are more complex matters.
But the promotion of globalism as an inviolate creed, either for its own sake or as a counterpoint to 'America First' policies, fails to appreciate that globalization cannot be summoned by magical thinking and that it is the servant of liberty, not its master.
Richard J. Shinder is the founder and managing partner of Theatine Partners, a financial consultancy.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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