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Trade hasn’t always been the liveliest of topics. But with former president Donald Trump vowing to charge import duties on any foreign good entering the United States and President Joe Biden using subsidies to support domestic semiconductor and electric-vehicle manufacturing, the once-arcane subject has turned red hot.

With the Nov. 5 election fast approaching, leading experts on international trade convened at the Stanford Institute for Economic Policy Research (ÿ�ճԹ�) to examine why and how U.S. policies on trade have shifted dramatically under Republicans and Democrats and why this repositioning is likely to continue no matter who — Trump or Vice President Kamala Harris — wins the White House.

Both candidates “are laying out profoundly different visions of what they want American trade policy to look like,” said Peter Harrell, a nonresident fellow at the Carnegie Endowment for International Peace and a featured speaker at the 2024 Fall Policy Forum, which was hosted by ÿ�ճԹ� and the King Center on Global Development.

The Oct. 17 event — part of ÿ�ճԹ�’s Policy Forum series in which business leaders, academics, and policymakers delve into a key economic issue — kicked off on a positive note. Gregory Rosston, the interim director and Gordon Cain Senior Fellow at ÿ�ճԹ�, noted that worldwide merchandise trade volume has been remarkably resilient despite massive shocks like the wars in Ukraine and the Middle East, and economic conflicts among nations that have, in some cases, reduced trade and led to higher prices for consumers. Thinking about what comes next is critical, not just for the U.S. but also for the world, he said.

“There are many ways that different [trade] policies may play out and impact the global economy, supply chains, political stability, and international alliances and security,” Rosston told the audience.

At the forum, a dozen panelists explored the complexities, nuances, and potential consequences of America’s role in reshaping the world economy — including evidence that attempts to rein in China and Russia through tariffs and sanctions, respectively, haven’t worked and whether weakened multilateral bodies like the World Trade Organization can be fixed.

The impacts of trade policies are broadly felt around the world , added Katherine Casey, the King Center’s faculty director and a professor of political economy at the Stanford Graduate School of Business, in her opening remarks. “Trade policy and the rules of the game are hugely important to the health and productivity of economies in low- and middle-income countries,” she said.

Trade’s new complexities

One takeaway from the day’s discussion and debates: Even as trade has become increasingly fragmented, there is evidence that trade policy can help solve shared problems like climate change or offshore tax havens.

Catherine Wolfram, a professor at MIT Sloan School of Management who previously served as deputy assistant secretary for climate and energy economics in Biden’s Treasury Department, said set to take effect in the European Union and the United Kingdom in 2026 and 2027, respectively are “starting a global conversation” about how trade policy can be used “in the service of climate change and not as a threat to climate change.”

Wolfram said the U.S. has an opportunity to introduce carbon pricing — and a new source of tax revenue — as part of any deal to extend tax cuts made during the Trump administration that are set to expire at the end of 2025.

But any hopes for cooperation on such key issues were eclipsed by current U.S. trade policies and how — given that America is the world’s largest consumer — there’s not a lot other countries can do to blunt what happens next.

If anything, “what’s going to hurt the U.S. is the U.S.,” said William Duhamel, a founding principal of the San Francisco-based hedge fund Route One Investment Company.

On that point, speakers differed on whether Trump means it when he says he will impose tariffs on all U.S. imports.

Duhamel said the former president’s threat is a nonstarter. “The world can’t go back on trade,” he said. “The world would collapse.”

But Kimberly Clausing, a former deputy assistant secretary for tax in Biden’s Treasury Department who is now a professor at UCLA School of Law, warned against dismissing Trump’s declaration as political posturing ahead of the November election. “I take these threats extremely seriously,” she said. “He’s talking about a level of shocks [that] will make us a rapidly declining power and much poorer than we would be.”

Policy pressures, no matter who wins

It's worth remembering that industrial policy isn’t new to the U.S., said Jennifer Harris, co-author of War by Other Means: Geoeconomics and Statecraft (Harvard University Press, 2016) and a panel speaker. The economic booms that followed the construction of the transcontinental railroad and the national highway system, for example, resulted from government intervention in the economy.

“Industrial policy is saying that markets are a tool, not an end to themselves,” Harris said. But getting industrial policy right is tricky, she added. “There are lots of cautionary tales that you want to take heed of in the ‘how’ of industrial policy.”

To that end, both the Trump and Biden-Harris administrations’ trade policies introduced challenges, according to panelists.

Consider, for example, Trump’s tariffs on Chinese imports: Multiple analyses have concluded that American companies and consumers have borne the full cost of those import duties and for reasons that aren’t yet entirely clear, said Stephen Redding, an economics professor at Princeton who is currently a Trione Visiting Professor at ÿ�ճԹ� through June.

“Nobody yet has really got a full understanding of why” Chinese companies have escaped the pain of U.S. tariffs, he said, but the sheer size of China’s manufacturing sector could be the reason.

Meanwhile, the Biden-Harris administration’s efforts to bolster U.S. semiconductor manufacturing — an example of how national security concerns are intertwined with industrial policy — is having unintended consequences, said Duhamel. China has been struggling for a quarter century to build its own semiconductor manufacturing capability, he said. Now that advanced chipmaking has become so politicized, China is more determined than ever to succeed.

“Chinese imports of western semiconductor equipment are going through the roof” despite U.S. export controls, Duhamel said. “The net impact is probably going to be [a] much stronger competitor than we would’ve had otherwise.”

And new Biden-Harris administration subsidies aimed at supporting U.S. electric-vehicle manufacturing have risked angering two key U.S. allies — Japan and Europe.

“There are unresolved policy tensions in both the Trump approach to trade and the Biden approach to industrial policy [that] will have to be sorted out in one form or another no matter who wins the election,” said Brad Setser, a senior fellow at the Council for Foreign Relations.

*All photos by Ryan Zhang.