Matthew Lau: Protectionists live in economic wonderland

U.S. President Donald Trump speaks before signing an executive order during an event in the Oval Office of the White House on Aug. 10, 2026 in Washington, D.C. Photo by Anna Moneymaker/Getty Images

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“To enter the mind of a sincere protectionist,” according to economist Don Boudreaux, “is to step, like Alice, through the looking-glass. Up becomes down. Light becomes dark. Yes becomes no. More becomes less. Less becomes more. Everything is backwards, twisted, bizarro, and ultimately incomprehensible.”

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In recent years, the White House’s Protectionist-in-Chief has turned much of the political landscape into an upside-down Wonderland. Among the things that are now topsy-turvy is that the Republican Party increasingly practices socialism, while actual socialists, at least on international trade, champion freer markets.

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Under socialism, government owns the means of production, which the U.S. government increasingly wants to do. In June, through $750 million in investments, it took minority equity stakes in two semiconductor companies. In July, through up to $874 million in additional funding, it took minority equity stakes in six more and increased its ownership of a seventh. The Cato Institute counts 30 companies in the federal government’s expanded corporate portfolio. “Republicans warning that communists are taking over the Democratic Party might first ask why their own administration is so eager to have the government acquire pieces of private companies,” Cato analyst Tad DeHaven suggested.

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DeHaven is not alone in pointing out the Republicans’ hypocrisy. Last week, a column in Reason by Veronique de Rugy ran under the headline, “The GOP is warning about socialism while quietly embracing it.” My only quibble is with the word “quietly.” Trump and the Republican Party are many things, but “quiet” is not one of them.

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Appearing recently on Fox News, Vice President J.D. Vance denounced socialism but then loudly touted the Trump administration’s increased protectionism, control over manufacturing, and “investments” in manufacturing and energy. Ironically, he was advocating protectionism in the context of making life more affordable for Americans. Economist Alex Tabarrok summarized Vance’s position thus: “Socialism is evil … now let me tell you all about my socialist policies to fix the economy.”

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According to Trump and Vance, Americans will benefit from lower prices and more goods and services if people from Canada, Mexico, Asia, Europe and everywhere else are prevented from offering goods and services to Americans at lower prices. It is this sort of absurdity that leads economists to say entering the mind of a protectionist is like stepping into a backwards, incomprehensible opposite-land.

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Protectionism and socialism are not the same thing. Unlike die-hard socialists, most sincere protectionists do not want to abolish private property or have the government seize the means of production. But protectionists do want to increase government control over private property and the means of production. They want greater government control over where private actors acquire the means of production, to whom they sell it and how they spend their own money, which is the fruit of their production.

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So backwards have Republicans become on free trade and protectionism that they are now more socialist than actual socialists. According to a new poll, 85 per cent of Democrats who approve of the Democratic Socialists of America support free-trade agreements with other countries either strongly (54 per cent) or somewhat (31 per cent). Support for free trade is next strongest among Democrats who don’t approve of the DSA: 76 per cent of them are for free trade, including 37 per cent who support it strongly. Independents also support free trade (at a rate of 66 per cent, including 33 per cent strong support). Finally, in last place, are Republicans, among whom there is only 65-per cent support for-free trade agreements, with only 25 per cent of that support “strong.”