Free Trade Orthodoxy Prevents Harm
False Assumption: Unrestricted free trade always benefits the economy without causing offshoring or strategic disadvantages.
Written by FARAgent on February 11, 2026
In the late 20th century, economics majors absorbed the free trade orthodoxy in college. Leaders occasionally imposed pragmatic protections, such as Ronald Reagan's quotas on Japanese cars and the longstanding U.S. tariff on pickup trucks. Still, the dogma held sway, discouraging stronger measures against offshoring.
Bill Clinton surrendered presidential tariff powers over China to Congress, signaling to CEOs that they could shut American plants without restraint. NAFTA positioned Mexico as a low-wage platform. American manufacturing declined as outsourcing accelerated to China, a rising strategic rival. Jerry Pournelle proposed a moderate 10% universal tariff in 1999 to slow this defensively, but it went unheeded.
Today, the Biden Administration pursues multi-year rebuilding of supply chains in chips and rare earths. Trump imposes targeted tariffs on China but suspends others amid market reactions. Critics question the old dogma as reshoring gains traction, though economists largely defend free trade with caveats.
People Involved
- In the late 1990s, Bill Clinton championed free trade as president. He handed over his authority to impose tariffs on China to Congress, a move that told corporate leaders they could offshore without fear. American CEOs seized the chance, closing domestic factories and shifting production abroad for quick profits.
- Meanwhile, commentator Jerry Pournelle sounded alarms in 1999, calling for a flat 10 percent tariff to curb the rush to China. His warnings went unheeded at the time. [1]
▶ Supporting Quotes (3)
“Bernie Sanders has, I believe, argued that Bill Clinton giving up some of the Presidents’ power to Congress to impose tariffs on China was taken as a message to American CEOs that the political leadership wouldn’t hold them back from shutting down their American plants and outsourcing everything.”— Procrastination rules!
“Jerry Pournelle in 1999 argued for a simple 10% tariff on everything as a defensive way to slow outsourcing, to throw some grit in the gears of the rise of China, but still allow it when the foreign cost advantage got too sizable to ignore.”— Procrastination rules!
“Bernie Sanders has, I believe, argued that Bill Clinton giving up some of the Presidents’ power to Congress to impose tariffs on China was taken as a message to American CEOs that the political leadership wouldn’t hold them back from shutting down their American plants and outsourcing everything.”— Procrastination rules!
Organizations Involved
Northeast Asian governments shielded their auto industries with protectionist barriers, building strength behind closed doors. Across the Pacific, U.S. elites embraced free trade doctrine, tipping the scales in uneven deals. Critics argue this institutional bias let foreign powers gain ground while American bodies enforced open markets at home. [1]
▶ Supporting Quotes (1)
“For example, the Northeast Asian governments wanted their firms to dominate the world automobile market, and the firms were working hard to deserve that domination.”— Procrastination rules!
The Foundation
In the halls of American universities, economists taught that unrestricted free trade always lifted economies. This view held that protectionism stifled growth and offshoring carried no real strategic threats. Critics now argue these foundations rested on shaky ground, with mounting evidence pointing to overlooked risks in global supply chains. [1]
▶ Supporting Quotes (1)
“Having majored in college in economics (among other things), I of course absorbed the free trade orthodoxy.”— Procrastination rules!
How It Spread
The idea took root in college economics classes, where professors drilled free trade as gospel. Graduates carried it into boardrooms and policy circles, dismissing protectionism as backward. Over decades, this curriculum shaped a generation of leaders, with social pressures sidelining doubters. Growing questions now surround how such uniform teaching ignored real-world frictions. [1]
▶ Supporting Quotes (1)
“Having majored in college in economics (among other things), I of course absorbed the free trade orthodoxy.”— Procrastination rules!
Resulting Policies
By the end of the 20th century, Bill Clinton ceded presidential tariff powers over China to Congress, paving the way for unchecked offshoring under free trade banners. NAFTA followed suit, positioning Mexico as a cheap manufacturing hub without weighing strategic downsides. Mounting evidence challenges whether these moves truly served long-term interests, as critics point to the vulnerabilities they created. [1]
▶ Supporting Quotes (2)
“Bernie Sanders has, I believe, argued that Bill Clinton giving up some of the Presidents’ power to Congress to impose tariffs on China”— Procrastination rules!
“I thought it made sense back then under NAFTA to treat Mexico as our China, our own low-wage platform for polluting industry”— Procrastination rules!
Harm Caused
American manufacturing withered as jobs flowed to China, fueling that nation's climb as a rival power. Factory workers saw careers cut short, with no buffers to ease the shift. Critics argue this unchecked outsourcing exacted a steep toll, though the full extent remains debated. [1]
▶ Supporting Quotes (2)
“I wish we had done more back at the turn of the century to slow offshoring to China.”— Procrastination rules!
“Jerry was concerned about Washington’s history back around the turn of the 20th Century of corrupt sausage-making when it came to tariffs. But note that Jerry’s scheme was defensive: to slow the rise of a strategic rival and allow more American factory workers to finish out their careers doing what they knew how to do.”— Procrastination rules!
Downfall
Under the Biden Administration, pushes to reclaim chip and rare earth production at home began highlighting free trade's blind spots in key sectors. Earlier, Trump's tariffs on China stirred market unease, especially when pauses revealed dependencies. Growing questions surround the old orthodoxy, as these steps suggest critics' warnings may hold weight after all. [1]
▶ Supporting Quotes (2)
“For instance, they induced the Taiwanese to not put all their chipmaking baskets in dicey Taiwan (legally speaking, who exactly is sovereign of Taiwan?), but to also invest in purple Arizona.”— Procrastination rules!
“Hence, today, Trump suspended his new tariffs on everybody except China for 90 days. And stocks soared.”— Procrastination rules!
Sources
-
[1]
Procrastination rules!opinion