Free Trade and the Rule of Law – Religion & Liberty Online

Imagine a neighborhood that has experienced high crime rates for years. A local “neighborhood watch” group forms, but it only talks about resolutions without taking any action. Criminals are found guilty but then immediately released back onto the streets to continue their illicit activities.

Eventually, a fed-up resident decides to take matters into his own hands, kicking in doors, roughing people up to “get answers,” and sending a few innocent bystanders to the hospital along the way. Neighbors cheer—at first. But as the vigilante targets friends and invents slights to justify his erratic behavior, the community recoils.

Unfortunately, that’s U.S. trade policy right now.

President Trump’s list of grievances contains a kernel of truth. When China joined the World Trade Organization in 2001, people thought that greater trade and greater prosperity would eventually bring liberalization to the people of China. Trade certainly brought prosperity for China, but liberalization never came.

Instead, over the past 25 years, China has violated WTO rules repeatedly and brazenly. Forcing technology transfers, stealing intellectual property, requiring joint ventures with Chinese partners, blocking American firms from competing in Chinese markets, and ignoring property rights writ large has been a matter of policy for Beijing, not the exception.

To rectify this, the U.S. brought case after case before the World Trade Organization, especially against China, with roughly 90% favorable rulings. Unfortunately, there was never any real enforcement mechanism that the WTO was able and willing to implement. China was never kicked out nor was its Most Favored Nation status ever suspended.

And so Trump, like many people fed up with injustice, decided to take matters into his own hands. Rather than work through legitimate processes (and strengthening them where necessary), he decided to dispense justice himself.

Though we generally oppose tariffs, even Adam Smith—the father of free trade—acknowledged their strategic utility. He argued that targeted trade restrictions might impel other countries to lower their own trade barriers. His point, though, was that this is wise only insofar as we can reasonably expect the other country to lower its barriers in response.

This can work well with a specific target and a clear end goal in mind. President Nixon, for example, used the Trading With the Enemies Act to convince other countries to stop pegging their currency to an overvalued dollar. A few months later, when the specific and identifiable goal was achieved, Nixon rescinded the tariffs—they had served their purpose.

Similarly, President Trump threatened tariffs and other trade restrictions against countries like Canada, Mexico, Colombia, and El Salvador in early 2025 to gain some concessions. Canada agreed to increase their efforts at stopping fentanyl from crossing their border into the U.S. Mexico agreed to increase their border security to stop people from illegally crossing into our country. And Colombia and El Salvador agreed to accept deported migrants and prisoners from the U.S.

One can debate the ethics of these specific concessions, but at least the administration pursued identifiable goals. On April 2, 2025, that focus vanished. On “Liberation Day,” President Trump unilaterally imposed tariffs on friend and foe, rich and poor, and, shockingly, inhabited and uninhabited alike. As if this weren’t enough, the president continued imposing, modifying, and threatening tariffs for what can only be described as capricious reasons.

When Swiss Finance Minister Karin Keller-Sutter called, asking for reductions in tariffs, Trump instead raised them because he didn’t like “the way she talked,” which he later defended at Davos by saying that she “just rubbed [him] the wrong way.” And when Canada aired their now-famous anti-tariff commercial, the White House responded by threatening additional 10% tariffs if they did not take the ad down immediately.

These examples highlight four problems with vigilante justice and why civilized societies operate according to the rule of law.

First, the punishment rarely fits the crime, because a vigilante does not conduct a trial but instead acts on grievance. Tariffs applied uniformly to 180 countries do not reflect trade agreements, bilateral relationships, or actual violations. They treat friendly countries like Norway as if they were in the same category as North Korea. And when the tariffs are implemented, the pain is often inflicted on innocent bystanders. The tariffs that were supposed to target Beijing? Those showed up as costs borne by American importers, manufacturers, and consumers, none of which had anything to do with China’s trade practices.

A second problem is the lack of a standard of guilt. Real justice requires demonstrating an offense, not just alleging one. Adam Smith understood this, Nixon applied it, and Trump, to his credit, initially did as well. Targeted trade restrictions can work when the offense is demonstrated and the form of redress is specific. “Liberation Day” and the subsequent haphazard tariff policies had none of these.

A third problem of vigilante justice is the lack of restraint on the enforcer. This was exactly the issue at the heart of the recent legal challenges to the administration’s use of IEEPA. The concern was that the executive branch assumed virtually unlimited power to tax the world at will for any slight, legitimate or imagined. The Constitution gives Congress, not the executive, the power to regulate commerce for good reason. Concentrated, unchecked power tends to be abused, regardless of who holds it or how righteous their initial claims may be.

The fourth, and arguably the most damaging, problem is the unpredictability of capricious vigilante justice. Businesses can adapt to a consistent 25% tariff through changes in pricing, contracts, supply chains. But capital investment withers under uncertainty. Businesses cannot plan for a future where tariff rates might swing from 10% to 145% based on a weekly whim.

Factories cannot be picked up and moved as tariff rates change. Tariff uncertainty is the most important tax on American prosperity. It has also created the greatest cost to the U. S. internationally. Vigilante justice is certainly tempting and feels satisfying when the target is obviously guilty. But it becomes something else entirely when the vigilante starts behaving erratically.

The U.S. spent decades earning a reputation as a reliable, rules-bound trading partner. That reputation has been seriously harmed and cannot be quickly restored. Even if President Trump announced “final” tariff rates tomorrow, very few CFOs, foreign ministers, or trade negotiators would believe him. Talk is cheap; real commitments are not.

There is a reason civilized societies settled on courts, statutes, and written rules rather than leaving justice to the most aggrieved person in the room. The rule of law is not merely an efficient arrangement; it is a moral achievement, built upon slowly and, as we’re finding out, surrendered quickly. It protects the innocent from punishment they did not earn, constrains the powerful from acting on impulse, and ensures that the same standards apply to everyone: political allies and personal irritants alike. These are requirements of justice, not just practical virtues.

Lord Acton famously warned that power tends to corrupt and that absolute power corrupts absolutely. He understood that the problem of unchecked authority is not merely that it produces bad outcomes, but that it degrades the character of those who wield it and the institutions that permit it. A trade regime that vests one man with the authority to tax the world at will, answering to no standard and subject to no review, risks economic harm, sure. But it also erodes the very habits of ordered liberty that make prosperity and justice possible in the first place.

The only way to rebuild the credibility we once had is the same way it was built in the first place: a system of clear rules that are applied consistently and have real consequences for violations. That could mean reforming and strengthening existing institutions, such as the WTO, building new ones altogether, or empowering Congress to reclaim its authority over trade and diplomatic relations. Whatever the solution, the answer must be a system, not a person. Trade disputes need to be resolved by something resembling a courthouse, not a social media feed.

The WTO is not perfect and certainly does not deserve a free pass. They failed to enforce their own rules against China and in doing so, opened the door to much of the vigilante-style justice that the Trump administration has been dispensing over the past year. That failure deserves criticism, but destroying what remains of a rules-based trading order is not the solution.

None of this is easy, and we do not pretend to have all the answers. But returning to a rules-based system is certainly bound to produce more stability and, with it, more prosperity than what we have seen. We must reform the courthouse, not burn it down.