Debate over Donald Trump’s tariff doctrine has turned toxic for one simple reason: Critics keep mistaking the tool for the target. The tariffs aren’t the policy. They’re the lever.
The real goal is to dismantle anti-competitive market distortions, which have strangled global growth for decades. According to a recent paper from the Growth Commission, which I chair, roughly 80% of the world’s economic drag from trade barriers doesn’t come from tariffs at all. It comes from domestic distortions that tilt markets toward protected incumbents and away from new entrants.
Trump’s trade doctrine is not a rejection of free trade. It’s a correction.
If Trump’s doctrine succeeds in forcing other nations to roll back those distortions, U.S. tariffs will fall — and global growth will surge.
Hidden barriers
What counts as an ACMD? The test is simple and pro-market: Does a policy block voluntary exchange and weaken efficiency? If it does, it’s distortionary.
These distortions take many forms: subsidies that protect national champions, licensing rules that freeze out competition, or “harmonization” regulations that entrench advantage under the guise of fairness. We propose a clear diagnostic: measure the GDP loss per capita caused by these distortions. We found three pillars that predict income performance: international competition, domestic competition, and property rights.
The results are striking. A one-point gain in domestic competition correlates with an 11.2% rise in GDP per capita. Strengthening property rights adds about 7%, and boosting international competition adds roughly 4%.
The conclusion is obvious: the fastest path to prosperity isn’t another tariff round. It’s aggressive pro-competition reform.
Where globalization went wrong
The failure of the modern trading system didn’t come from liberalizing at the border — it came from stopping there.
Since the 1990s, global institutions have trimmed tariffs but tolerated an explosion of industrial policy, subsidies, and regulatory frameworks that quietly cripple competition.
Look at the U.S. trade representative’s annual National Trade Estimate report. The latest edition runs 397 pages cataloging barriers to global growth. Fully 80% aren’t tariffs. They are behind-the-border distortions — ACMDs — doing the real damage.
Trump’s trade doctrine is not a rejection of free trade. It’s a correction. It uses America’s market access as leverage: Reduce your distortions and our tariffs go down. Refuse and face penalties. The measure of success isn’t political theater — it’s income growth. How much GDP per capita can be restored by real reform? That’s the metric that aligns incentives at home and abroad.
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Photo by Dilara Irem Sancar/Anadolu via Getty Images
Reform by incentive
Future deals should include an ACMD chapter requiring competitive neutrality, limits on subsidies, and mutual recognition between trading partners. This turns tariff negotiations into something productive: a race to open markets, not close them.
The doctrine also turns inward. The Trump administration has directed federal agencies to identify and eliminate domestic rules that block competition. That matters both for credibility and growth. If America expects others to reduce distortions, it must show the same resolve at home — in health care, licensing, and sectors riddled with protectionist rules.
What companies should do
Business leaders should treat this as a once-in-a-generation opening. First, expose distortions. Identify anti-competitive market distortions and report them to the U.S. trade representative.
Second, de-risk supply chains. Avoid jurisdictions that refuse to reform. Tariffs will make them unviable.
Third, coordinate with allies. Work with like-minded firms to propose reforms where tariff relief can follow.
The incentive is powerful: Reform your markets, gain access to ours.
The strategic payoff
Reducing market distortions isn’t just about economics. Ultimately, it’s about power. State-backed distortions — especially in economies built around state-owned enterprises — fuel geopolitical coercion. They channel wealth into non-market dominance. Linking market access to ACMD reduction forms a “coalition of the willing” that ties prosperity to liberty.
Critics call tariffs blunt instruments. They’re right. But they may be the only tools sharp enough to cut through the web of distortions that standard trade talks have ignored for 30 years. If America can use its market power to unlock true competition abroad while cleaning up its own regulatory excess at home, the result will be stronger wages, higher productivity, and renewed global leadership.
That’s the promise of the Trump doctrine — not a wall of tariffs, but a bridge to freer markets and faster growth.
Opinion & analysis, Opinion, Trump tariffs, Tariffs, Tariff policy, Free trade, Trade, Competition, Markets
