In their Sept. 22, 2026, Wall Street Journal opinion piece, former Republican Sen. Phil Gramm and George Mason University economist Donald Boudreaux argue that the Republican Party may eventually move away from President Trump’s protectionist trade policies and return toward the freer-trade orientation associated with Ronald Reagan. Their immediate political premise is conditional: if Republicans suffer substantial losses in the November 2026 midterms, they believe tariffs could become one of the policies party members reconsiders. The WSJ describes the piece accordingly: “If Republicans lose big in November, watch for them to move away from Trump and back toward Reagan.”

I received an undergraduate degree and master’s degree in economics. Uniformly, our studies supported Free Trade. Milton Friedman was one of the twentieth century’s most prominent advocates of free trade. His starting point was consumer welfare rather than the fortunes of some industries. Friedman argued that people often think about international commerce backward: exports are goods Americans give up, while imports are goods Americans get to consume. In his formulation, the benefit of trade is the imports; exports are what a country gives in exchange for them.

That reasoning led Friedman to oppose protectionism even when other countries maintained their own trade barriers. He argued that another country’s tariffs already harm the opportunities for mutually beneficial exchange; retaliating with American tariffs compounds the damage by restricting Americans’ choices and raising their costs. His preferred economic policy was therefore movement toward free trade, potentially even unilateral free trade rather than requiring exact reciprocity from every trading partner.

Graham and Boudreaux economic case against tariffs rests on a familiar principle: a tariff is effectively a tax on imported goods. Although designed to protect domestic producers from foreign competition, tariffs can also increase costs for American consumers and for U.S. manufacturers that use imported components, raw materials, machinery or intermediate goods. Retaliatory tariffs imposed by trading partners can additionally disadvantage American exporters.

They also reject the idea that America’s decline in manufacturing employment proves that free trade “hollowed out” U.S. manufacturing. In their broader work, they emphasize that inflation-adjusted U.S. manufacturing value added has remained very large even while manufacturing employment has fallen, pointing particularly to productivity improvements as an important reason – fewer workers can produce more output!

Another target of their argument is the trade deficit. Gramm and Boudreaux have previously noted that the United States has run persistent trade deficits for decades without an obvious corresponding collapse in economic growth. In a 2025 WSJ letter, they compared periods before and after the U.S. moved into sustained trade deficits and argued that the historical record does not show deficits automatically suppressing per-capita economic growth.

“Americans have reaped enormous gains from the fall of protectionist barriers. Per capita gross domestic product has risen 367% since 1947.

U.S. agriculture needs foreign markets, and almost all U.S. manufacturing needs foreign components.

Our AI industry relies on foreign chips and other imported components to remain cost-efficient and will need open foreign markets to sell the explosion of U.S. production that AI dominance will bring.”

Economists do not generally say that every trade deficit is automatically beneficial. A trade deficit means imports exceed exports and has a counterpart in international capital flows: foreigners are acquiring U.S. assets, securities or other claims. Whether that situation is concerning depends on why the deficit exists, how the associated capital is being used, government borrowing, national saving and other macroeconomic conditions. A large deficit can therefore coexist with strong economic performance, though persistent imbalances can also create vulnerabilities.

Friedman was similarly skeptical of treating a trade deficit as inherently bad. The terminology itself, he argued, encourages confusion. Calling exports a “favorable” balance and imports an “unfavorable” one reverses the consumer perspective: Americans ultimately engage in production and exports so they can acquire goods, services and investments they value.

His broader framework treated international payments as part of an interconnected system: dollars sent abroad to purchase imports do not simply disappear. Foreign holders can use them to buy American exports or acquire U.S. assets such as businesses, securities and government debt.

The intellectual connection is straightforward. Gramm and Boudreaux are making a recognizably Friedmanite case: judge trade primarily by whether voluntary exchange expands economic opportunities and consumer purchasing power, rather than by whether exports exceed imports or whether domestic industries are insulated from competition.