Adam Smith Critiques Trump's Mercantilism

TL;DR

Hubbard's Smith Critique: Glenn Hubbard uses Adam Smith's Wealth of Nations to argue Trump's mercantilist policies limit growth and fail stated goals.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[2]](https://www.project-syndicate.org/commentary/what-adam-smith-would-tell-donald-trump-ahead-of-the-us-midterm-elections-by-glenn-hubbard-2026-04)
Supreme Court Ruling: The Court reversed Trump's tariffs under the International Emergency Economic Powers Act, raising legal doubts.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[3]](https://www.politico.com/news/2026/02/20/trump-tariffs-supreme-court-ruling-00790687)
Pro-Growth Pivot: Trump should shift to competitive markets plus worker training, research funding, and high-skilled immigration to address disruption.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)

The story at a glance

Glenn Hubbard, a Columbia economist and former Bush adviser, argues in this opinion piece that Adam Smith's ideas expose flaws in President Trump's protectionist economic agenda ahead of November's midterm elections. Trump's tariffs have driven up living costs and faced a Supreme Court reversal under the International Emergency Economic Powers Act (IEEPA). The piece, timed for the 250th anniversary of The Wealth of Nations, urges a pivot to markets open to competition paired with aid for workers hit by technological change and globalization.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[2]](https://www.project-syndicate.org/commentary/what-adam-smith-would-tell-donald-trump-ahead-of-the-us-midterm-elections-by-glenn-hubbard-2026-04)

Key points

Trump's mercantilist approach seeks to shield producers from foreign competition but invites rent-seeking and curbs openness needed for growth.
Protectionist measures, including tariffs, have raised living costs, drawn a Supreme Court rebuke, and questioned their legal basis under IEEPA.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[3]](https://www.politico.com/news/2026/02/20/trump-tariffs-supreme-court-ruling-00790687)
Smith emphasized competitive economies with limited government to foster specialization and higher living standards, contrasting modern growth models' disruption.
Proposed alternative: "ability to compete" via community college block grants, expanded Earned Income Tax Credit, re-employment accounts, and place-based aid.
Further steps include high-skilled immigration, R&D funding, regulatory easing for AI and housing, and dropping broad tariffs.
These changes could accelerate growth, cut joblessness, and appeal to voters worried about economic upheaval before midterms.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)

Details and context

Hubbard roots Trump's agenda in valid voter concerns over job and community losses from technology and trade, but argues mercantilism—prizing surpluses and state control—repeats historical errors Smith critiqued 250 years ago.

Smith's core insight in The Wealth of Nations is that wealth arises from market-driven specialization, not state hoarding; his Theory of Moral Sentiments adds empathy for the disrupted, inspiring "mass flourishing."

The Supreme Court's recent 6-3 decision struck down Trump's IEEPA tariffs as exceeding authority, creating a window to drop protectionism that hikes input costs for manufacturers.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[3]](https://www.politico.com/news/2026/02/20/trump-tariffs-supreme-court-ruling-00790687)

Treasury Secretary Scott Bessent has hinted at pro-growth shifts, but reconciling them with ongoing mercantilism remains tough.

Key quotes

"The Wealth of Nations offers a useful lens for understanding why US President Donald Trump’s mercantilist agenda has fallen short of its own stated goals." – Glenn Hubbard[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)

"Two hundred fifty years after its publication, The Wealth of Nations points to a necessary pivot away from mercantilism and toward a more balanced, pro-growth framework." – Glenn Hubbard[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)

Why it matters

Trump's economic policies shape global trade and US growth amid midterm risks for Republicans.

Voters facing higher costs and job shifts get a roadmap for policies blending markets with skill-building and immigration reform.

Watch if the administration drops tariffs post-Supreme Court ruling or pursues workforce and R&D boosts before November, though political hurdles may block change.[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)

[[1]](https://www.aei.org/op-eds/adam-smith-on-the-us-midterms/)[[2]](https://www.project-syndicate.org/commentary/what-adam-smith-would-tell-donald-trump-ahead-of-the-us-midterm-elections-by-glenn-hubbard-2026-04)