Tariffs versus subsidies: protection versus industrial policy

In 2025, the United States raised tariffs to rates not seen for more than a century. These tariffs were not part of a carefully designed industrial strategy. In fact, the second Trump administration distanced itself from existing industrial policy initiatives and indicated a desire to roll back government-funded subsidies for businesses. This article examines the rationale behind the United States’ pivot from subsidies to tariffs and explores implications for trade partners and multilateral institutions.