A temporary truce in the US-China trade war highlights a new era of economic friction, negatively impacting global growth. While targeted tariffs may have merit for national security, broad permanent tariffs aimed at boosting US wealth are misguided, as free trade enhances welfare through specialization, as demonstrated by David Ricardo’s principles. The shift towards tariffs jeopardizes trade benefits, as seen in the US-Canada aluminum example, where domestic production may not be feasible, stressing the need for education and mobility to address trade’s adverse effects rather than retreating from free trade.
