Why Liberals Fear Trump’s Trade Agenda
Liberals claim they oppose President Donald Trump’s tariffs and trade policies because they will raise prices or undermine the post-war economic system. But the real reason they are desperate to stop Trump’s trade agenda is much simpler: it threatens the structural forces that drive government expansion.
For nearly 50 years, America has run chronic trade deficits. From 1974 through 2024, our cumulative trade deficit amounts to over $20 trillion. This is a structural force that has reshaped the U.S. economy, driving the country toward greater dependency on government intervention. A persistent trade deficit means that more money is leaving the economy than coming in, creating a shortfall in national income. That shortfall has to be filled somehow.
A persistent trade deficit creates an unavoidable economic imbalance, and there are only three possible responses. The first is to do nothing—allow the deficit to shrink U.S. income, reduce employment, and weaken domestic production, an outcome that is economically unsustainable and politically unacceptable. The second is to fill the gap with government spending—running ever-larger deficits to subsidize the economy, which only expands government dependency and accelerates America’s debt crisis. The third, and the only sustainable option, is to adopt America-first trade policies that shrink the deficit, restore industrial capacity, and allow private-sector growth to replace government intervention.
Washington, under both parties until relatively recently, has long preferred the second option. Rather than reversing the trade deficit, policymakers have allowed it to expand while simultaneously increasing the role of government to compensate for the damage it causes. This is how America got an economy in which productivity and wages stagnated, but government dependency surged. The same forces that hollowed out America’s industrial base gave rise to a permanent expansion of the welfare state.
Reprivatizing the U.S. Economy Through Nationalist Trade Policy
But Trump is breaking that model. Treasury Secretary Scott Bessent recently described the administration’s broader economic strategy as “reprivatizing” the American economy. That means reversing the decades-long process by which Washington policymakers sacrificed private-sector dynamism in favor of government-managed economic stability.
Reprivatizing the economy starts with reversing the trade deficit. If trade deficits have fueled government expansion, then shrinking them is the key to rolling it back. A lower trade deficit would keep more money circulating in the domestic private sector, strengthening American businesses and creating more jobs. Rather than relying on government programs to sustain demand, a strong labor market would allow wages to rise naturally, reducing the need for stimulus and entitlements. With less dependence on foreign capital to finance trade imbalances, the U.S. could reduce government borrowing and work toward shrinking the national debt.
This is the exact opposite of the cycle that has governed the American economy for decades. A persistent trade deficit demands permanent government expansion, while a declining trade deficit allows for the reduction of government’s role in the economy.
The Left’s Expansion of the Model: DEI, Climate Regulations, and Financial Overreach
Trade deficits are not the only way liberals have structured the economy to justify government expansion. The same pattern is visible in nearly every major policy area: weaken private-sector productivity and output, let the resulting economic strain worsen, then present government intervention as the only possible solution.
The push for Diversity, Equity, and Inclusion (DEI) mandates is a clear example. By forcing businesses to prioritize ideological hiring quotas over merit and efficiency, these policies have driven up costs, reduced productivity, and created inefficiencies across industries. But rather than allowing businesses to adjust on their own, the government steps in to “fix” the resulting economic distortions with subsidies, grants, and tax incentives that reinforce dependence on the state.
Climate regulations follow the same pattern. The left has spent years deliberately crippling American energy production through regulatory overreach, shutting down pipelines, and imposing draconian emissions standards. As a result, energy costs have risen, domestic manufacturing has become less competitive, and American consumers have been forced to rely more heavily on imports. And once again, rather than reversing the policies that caused the problem, liberals insist that the government must step in with subsidies, green energy incentives, and public-sector funding to prop up an artificially weakened economy.
The financial sector has been another target of this strategy. Excessive regulation and supervisory policies that have been focused on just about everything—diversity, inclusion, climate change—except safety and soundness, has made it more difficult for banks to lend money to small businesses. Instead of allowing free-market financing to drive growth, the government increasingly fills the gap through public-sector lending, stimulus programs, and federal credit facilities.
In each case, the formula is the same: impose a burden on the private sector, watch the economy slow, and then justify an even greater role for the public sector. This is the underlying mechanism of liberal economic control, and Trump’s administration is the first in decades to openly challenge it. Bessent’s idea of “reprivatizing” the economy is not just about deregulation—it is about reversing an entire economic model built on intentional dependency.
That’s why liberals hate it.
Trump’s Trade Policy Isn’t Just Protectionism—It’s a Mechanism for Shrinking Government
The opposition to Trump’s tariffs isn’t really about free trade. It’s about power. If the U.S. trade deficit is allowed to shrink—if America starts producing more at home rather than absorbing excess foreign production—then the government will no longer need to intervene as aggressively in the economy.
Liberals understand this. They know that a low-trade-deficit America is a lower-government America. They rely on the never-ending cycle of trade deficits feeding economic stagnation, which in turn feeds the justification for government expansion.
If Trump succeeds, it won’t just be a victory for trade policy. It will dismantle the left’s economic strategy of permanent government expansion—undoing decades of liberal control over the economy.
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