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At MCC’s latest Budapest Lecture, political scientist Paul Sracic examined how a second Trump presidency could reshape transatlantic trade, arguing that U.S. trade policy is now driven less by economics and more by domestic political strategy. Speaking alongside Lilla Bankuty-Balogh, Head of MCC’s Center for Global Economy, Sracic emphasized that the idea of “trade as a peace-building tool” has faded since the 1930s, when economic ties were believed to prevent war. Today, trade is increasingly tied to national security concerns, especially after COVID-19 exposed the vulnerabilities of global supply chains.
Sracic explained that Donald Trump views tariffs not merely as economic instruments, but as political tools to protect local industries and revive the manufacturing identity of mid-20th-century America. However, he noted that modern production is highly automated, meaning tariffs cannot recreate the employment levels of the past. While economists argue that free trade increases overall wealth, trade shocks create visible social and regional losses, especially in former industrial states such as Pennsylvania, and Michigan.These swing states, home to large working-class communities tied to manufacturing, have become decisive in U.S. elections, turning trade policy and protectionism into key campaign issues.
Looking ahead, Sracic said Trump would likely pursue a policy of “reciprocal tariffs,” matching foreign tariff levels to assert U.S. leverage. He also pointed to Trump’s admiration for Japan’s nationalist economic model, which prioritizes cultural cohesion and resists mass migration — a stance he sees as parallel to “America First.”
