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Listener Seamus Ennis from Huntsville, Alabama asks: 

Who are the "winners" of the globalization of trade? 

President Donald Trump’s protectionist stance is undoing decades of free trade policies. 

Since taking office for his second term, Trump has imposed a series of tariffs on goods and countries, which include a 10% baseline import tax and a 145% tariff  on most goods from China. He has also unveiled tariff rates of up to 50% on dozens of nations other than China, although he’s postponed these tariffs for 90 days. 

Over the course of decades, trade globalization has helped lower the price of goods and bolstered numerous U.S. industries, including financial and educational services. While economists say free trade has contributed to job losses in other industries, like manufacturing, they caution that automation is the bigger contributor and that unwinding global trade policies won’t help bring back these jobs. 

These tariffs don’t mean that we’ll suddenly have hundreds of thousands of workers assembling cars in Michigan, said Francesco Bianchi, an economics professor at Johns Hopkins University. 

In 1930, America imposed high tariffs on imports through the Smoot-Hawley Tariff Act, which raised duties on 20,000 imported goods and exacerbated the Great Depression. “The general contraction of trade led by trade barriers did harm the world economy,” said Doug Irwin, author of “Peddling Protectionism: Smoot-Hawley and the Great Depression,” in a 2017 “Marketplace” interview. 

The disastrous effects of the bill led the U.S. to enact the Reciprocal Trade Agreements Act in 1934, allowing the president to decrease U.S. tariff rates by up to 50% if other countries made similar reductions on U.S. exports. Over the years, the U.S. has reduced barriers to trade and enacted free trade agreements with other nations, like 1994’s North American Free Trade Agreement. 

The average tariff rate dropped from about 18% in 1934 to less than 2% in 2007. Under Trump’s trade policies, the average tariff rate is expected to go back up to 18% based on levies that have been implemented from the beginning of this year up until April 15, according to The Budget Lab at Yale. 

Consumers have won, in a sense, because we can import inexpensive goods, while U.S. companies can rely on cheaper labor and materials from other countries to help lower prices. “If you could have imagined that you could buy a T-shirt so cheap now compared to even 20 years ago, I think your mind would have been blown,” said Kara Reynolds, an economics professor at American University.

The U.S. is also a major exporter of various services which means these industries have thrived under globalization, Reynolds said. The U.S. exported $1 trillion worth of services in 2023. About $176 billion of that amount consisted of financial services and about $50 billion consisted of education-related exports in 2023. 

These services don’t have to be consumed outside America. For example, a professor teaching college courses to international students in the U.S. is exporting his or her services. 

Some of the services that the U.S. exports are also more artistic in nature. Lighting designer Greg Guarnaccia told Marketplace last year that he designed lighting for performing arts centers in Morocco and Japan. 

Agricultural and natural gas exporters are other major winners, said Gordon Hanson, an urban policy professor at Harvard University’s Kennedy School of Government. For example, the U.S. exports over half of its soybeans to China, selling almost $13 billion worth of the legume in 2024. 

The U.S. began ramping up liquefied natural gas exports about a decade ago as fracking made the resource more cost effective. In 2024, the U.S. exported an average of 11.9 billion cubic feet of liquefied natural gas a day, a 12% increase from just two years earlier. 

But while the U.S. economy has benefited from the globalization of trade, experts say, those benefits have been distributed unequally. 

“Everybody is simultaneously a winner and a loser. Because you are not one thing. You are not just a consumer, or an investor, or a citizen,” said Susan Ariel Aaronson, a research professor of international affairs at George Washington University.

Workers in towns that have relied on industries like furniture and footwear have faced higher unemployment rates and lower wages due to globalization, Reynolds said. 

However, even if companies started manufacturing more products in the U.S., manufacturing employment levels will reach nowhere near the heights they did 50 years ago, Reynolds said.

Factories have made huge productivity advances thanks to automation, which means manufacturing isn’t as labor intensive as it once was, Reynolds said. 

And because the current administration’s trade policies are always changing, companies don’t know whether to invest in new factories, she said.

As Trump has unwound trade policies, countries like China – a large market for U.S. services – will find ways to retaliate against American companies, Hanson said. 

“We can think of China as finding ways of just making life hard for those companies by taxing them or regulating them or punishing them in various ways. So that's going to roll back some of those gains that those sectors and workers in those sectors enjoyed over the last 25 years,” Hanson said.