TOKYO - Tariffs are back at the center of U.S. trade policy, with President Donald Trump recently imposing new duties on 60 trading partners, including Japan.
But the larger question is not whether tariffs will define Trump's remaining time in office. It is where U.S. trade policy is likely to go after he leaves.
Here are three plausible scenarios for the post-Trump trade era. My baseline case is the middle one.
Full Trump-style policy continuity is unlikely but not implausible, a 20 percent probability. Full Trump-style policy would mean the next president keeps tariffs at the center of trade policy, as Trump has done. Under this scenario, the next U.S. leader would actively impose tariffs, with practically no concern for the reaction from markets or foreign trading partners.
This outcome would require a successor with an unusually strong attachment to tariffs. It is hard to imagine the next president placing tariffs above priorities like economic growth and alliances to the same degree as Trump. Tariffs are in Trump's political DNA. But most politicians have a different political DNA.
Tempered Trumpism is the strong baseline case, 75 percent odds. It is the most likely outcome because Trump has left U.S. trade policy with a strong skepticism of free trade.
He has reshaped the Republican Party into a party more dependent on working-class voters, who tend to be skeptical of free trade. The old Republican free-trade consensus is now in deep hibernation. Right now, there is no influential Republican politician in Washington who is making a strong public case for free trade.
Looking at Democrats, for most of the postwar era, they have not favored free trade. Organized labor remains one of their most important constituencies. Although former President Joe Biden did not use tariffs like Trump, he generally continued Trump's approach while expanding export controls and promoting industrial policy.
The presidential Electoral College math needed to reach 270 votes also reinforces why both parties are likely to continue economic nationalism. Michigan, Pennsylvania, and Wisconsin have been key swing states in the last three presidential elections. The importance of these manufacturing states will pressure both Democratic and Republican presidential candidates to support protectionism.
China is another reason Trump's trade legacy will endure. Most Republican and Democratic lawmakers do not believe China will soon abandon its export-driven, state-subsidized economic model. Trump's successor is very likely to maintain pressure on China through tariffs, export controls and industrial policy.
While new tariffs on trading partners are likely to be less common, current tariffs will not vanish quickly. Tariffs are sticky because their costs are diffuse while their beneficiaries are concentrated. Steel, automobiles and other protected sectors will fight to preserve current tariff levels, and Congress will be reluctant to reverse them.
Free-trade restoration is the least likely scenario, 5 percent odds. It is possible, but only if some shock alters the current direction of U.S. trade policy.
For example, if China suddenly abandoned its export-driven economic model, this could potentially lead to a free-trade renaissance. That's because China's economic threat is one of the main reasons U.S. trade policy has turned protectionist. But as long as Xi Jinping is the leader, such a big change seems far-fetched.
In sum, the next president will likely take the path of Tempered Trumpism. Tariffs and trade restrictions will remain key tools, but they will probably be used in a less disruptive way than under Trump.
David Boling is Managing Director for Japan at The Asia Group, based in Tokyo. He was a U.S.-Japan trade negotiator under former President Barack Obama and the Trump and Biden administrations.)
