Tariffs: Why Oxford students are more protectionist than their professors

In a recent economics class at Oxford, my professor posed what seemed a straightforward question: Can anyone think of benefits of tariffs?

I’m not a mind reader, but the question seemed designed to be brief, a quick acknowledgment that tariffs exist, perhaps as Trumpian folly, before moving to the familiar terrain of free trade orthodoxy.

That is not what happened.

Instead, the discussion unravelled into a ten-minute detour that surprised everyone in the room, including the professor.

On the whiteboard (pictured), the conversation was divided into two columns: arguments for tariffs and arguments against them. What was unexpected was not that students could name drawbacks (those were familiar) but that the pro-tariff side kept growing, populated by arguments that were thoughtful, varied, and deeply grounded in policy experience.

The context matters. Oxford’s Master of Public Policy brings together 141 students from 63 countries — civil servants, political advisers, NGO workers, and private sector professionals. These are not ideological protectionists or economic nationalists by training or temperament.

That this group could fill a whiteboard with sophisticated defences of tariffs made the moment striking.

My classmates who care about climate policy spoke of tariffs as tools to reduce carbon emissions. Those from the Global South discussed infant industry protection and long-term capability development. Peers focused on national security emphasised the dangers of dependency, and not just in US–China competition. Others raised employment, political legitimacy, and the signalling value of domestic industrial priorities.

These were sophisticated arguments, many absent from standard trade models. What emerged was evidence of a widening gap. Economic theory still assumes a stable, cooperative world. The next generation of policymakers has to contend with strategic rivalry, fragile supply chains, and the return of great power competition.

After class, our professor reflected that five years ago, this discussion simply could not have happened at Oxford. That admission matters. It suggests not just changed economic circumstances, but a change in what is sayable in elite institutions.

Inflation remains a legitimate concern: tariffs raise prices for everyone, hitting the poor hardest. But there’s a political asymmetry here: when a factory closes, a thousand workers lose their jobs in the same town on the same day. The local news covers it. Politicians get blamed. Price increases from tariffs, by contrast, are spread across millions of consumers buying hundreds of products — a few extra dollars here and there that no one connects to trade policy. It doesn’t take a political guru to understand which creates more pressure on governments.

Shifting consensus: Nations as firms
US–China strategic competition, Covid-exposed supply chain vulnerabilities, and dependencies in critical technologies have changed how we think about globalisation. The theoretical promise of free trade feels hollow when measured against regional decline. In the American Midwest and British Midlands, towns built around manufacturing that still haven’t recovered decades after factories closed, tell the story.

More quietly, the framework for evaluating national success is shifting. Policymakers no longer judge countries solely by how much their citizens can consume. Stability, resilience, social cohesion, and productive capacity matter again.

Friedrich List, a nineteenth-century German economist largely forgotten in Anglo-American universities, offered a different way of thinking. He argued that nations should act like companies investing in their own capabilities. This means citizens pay more for goods in the short term. The payoff comes later: a more skilled workforce, advanced industries, and economic independence.

His ideas were dismissed by the free trade orthodoxy of comparative advantage posited by David Ricardo and John Stuart Mill. But they quietly shaped how Germany, Japan, and South Korea actually developed, and most importantly, China. Beijing’s state-led model is exactly what List had in mind: protect industries, build capabilities, accept higher prices now for strategic strength later.

China rose to rival the United States while following List’s playbook, not the Washington Consensus. Whatever its flaws, his approach produced results that pure free trade theory struggles to explain. In an era of renewed great power competition, policymakers are rediscovering why.

Academic theory vs political reality
Yet it is crucial to distinguish what has actually shifted. Academic economists remain largely committed to free trade principles — the intellectual consensus in economics departments has remained unchanged.

But even sympathetic observers have struggled to translate theory into prediction. The Economist declared in April 2024 that Trump's "mindless tariffs will cause economic havoc", only to conclude by October that they were "failing to break global trade". The contradiction is unavoidable: are tariffs devastatingly effective or harmlessly impotent? It reveals the difficulty of applying textbook models to a world where retaliation, currency adjustments, and supply chain restructuring confound simple predictions.

What has shifted is popular opinion and, following it, elite policy consensus. The Biden administration’s retention of Trump-era tariffs confirmed what policymakers understood: the political consensus supporting expansive liberalisation has collapsed. By 2028, those invoking the old free trade consensus risk arguing against a political reality that no longer exists.

The operational challenge
What the classroom discussion revealed was something deeper than a list of tariff benefits. We unconsciously started thinking about economics differently. We were treating nations like firms that need to invest in building capabilities — not just as groups of consumers trying to buy things as cheaply as possible.

Climate-focused students saw carbon emissions as costs a country needs to manage. Security-oriented students treated dependence on foreign suppliers as a dangerous vulnerability. Global South students understood industrial know-how as something valuable that requires investment to build.

The professor’s surprise wasn’t just that students could defend tariffs. It was that they had completely changed how they thought about the problem. They cared about building resilience, capability, and independence alongside keeping prices low and markets efficient. Standard economics textbooks barely consider these goals.

This is where policy lags behind the intellectual shift. The tariff debate is no longer one-sided, even at Oxford.

What’s missing is the practical follow-through. How do you actually implement trade policy focused on building capabilities rather than just maximising consumption? How do you tell the difference between genuine strategic needs and industries just looking for protection? Without clear principles, every industry will claim it’s strategically important.

Tariffs are not a panacea. They can raise prices, provoke retaliation, and entrench inefficiencies. But dismissing them as irrational is no longer tenable. What that classroom discussion revealed was how far economic orthodoxy has drifted from political reality.

The adaptation required is not merely accepting tariffs as legitimate policy tools. It is developing new frameworks for evaluating national success — frameworks that account for resilience and strategic autonomy, not just efficiency. My classmates were ahead of our professor not because they knew more economics, but because they’d already made that conceptual leap.

Policymakers who cling to consumption-focused metrics while practitioners optimise for resilience will not only lose debates. They will lose elections.

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Photo: Diliff, CC BY-SA 3.0 <http://creativecommons.org/licenses/by-sa/3.0/>, via Wikimedia Commons