By Theodore Bunzel

Donald Trump's return to the White House has thrust upon us a crash course in trade policy. The globe-spanning U.S. tariffs he declared on April 2, 2025 — "Liberation Day" — and the economic and legal drama that has ensued have imposed a heightened public awareness of everything from international trade deficits to Sections 122 and 301 of the United States Trade Act. Judging by the polls, most Americans view the tariffs as regrettable: 72% of voters believe Mr. Trump's tariffs have had a negative effect on the economy.

A sharper understanding of trade tensions and tactics is nonetheless warranted as governments erect new trade and investment restrictions and subsidies, which together are up fivefold since 2015. While there have been several excellent volumes published recently on the fate of the dollar (Paul Blustein's "King Dollar," 2025) and economic warfare (Edward Fishman's "Chokepoints," 2025), few have explored the ins and outs of trade policy in this increasingly Hobbesian economic environment.

Into the breach jump Soumaya Keynes and Chad Bown with "How to Win a Trade War," an accessible, well-researched and cheeky primer on the global trading system in, as they put it, "an anxious global economy."

Ms. Keynes is an economics columnist at the Financial Times; Mr. Bown is a senior fellow at the Peterson Institute for International Economics and was the State Department's chief economist during the Biden administration. Their book's central conceit is a bit disorienting at first: "imagine yourself as a [policymaker] desperate to wage a trade war," Ms. Keynes and Mr. Bown write. (From which country, against whom and why are left to the imagination.) The authors then use this frame to guide the reader through the shifting industrial-policy strategies of the major economies, the impact of various tools — from tariffs to export controls — at the disposal of trade warriors and the multinational firms and consumers caught in the fray.

If there is one villain in their story, it's China. The Trump administration's tariffs have been volatile, but China's industrial policies have for decades contorted global trade and fueled dangerous imbalances, epitomized by the $1.2 trillion trade surplus China reported last year. Between 2005 and 2019, China "handed out support six times as high as that received by similar sectors in OECD countries," the authors write, referring to the members of Organization for Economic Cooperation and Development. China's industrial support has systematically driven up its levels of domestic investment, overcapacity and exports. (Of course, the voracious U.S. appetite for debt has played a role in this story, too.) Such imbalances create a "wobbling" global trade system that in a crisis may lead to sharper swings in debt levels, capital flows and currency values — "the stuff of economists' nightmares."

Plus, China doesn't play fair. While Western multinationals are largely "inflexible, nervous and uncooperative" soldiers in enacting the will of policymakers, Beijing enlists its massive state-owned enterprises (SOEs) as force multipliers. During the 2018 U.S.-China trade war, for example, voluntary curbs by Chinese SOEs depressed trade with the U.S. by an additional 4 percentage points beyond the 8% decline induced by Chinese tariffs. What's more, China has a history of pilfering technology to get ahead: In 2025, one in five European companies in China said that Chinese firms had stolen technology.

"How to Win a Trade War" shows us that, even in the age of Trump, many of today's trade tensions are a historical rerun. Germany before World War I provoked backlash because of its sharp rise in exports and overproduction, similar to China today. Its cornering of an "extraordinary 90 percent of global production" of chemicals and dyes sparked fears of dependency among the Allies. Even the White House's coercive Liberation Day tariffs have an echo in history: 1870s France hiked tariffs 24% on its neighbors and demanded they negotiate more favorable trade deals within six months, a gambit that — like Mr. Trump's — largely succeeded in forcing trade partners to submit to new treaties.

With protectionism becoming more fashionable, Ms. Keynes and Mr. Bown provide a helpful reminder that tariffs are, generally speaking, economically destructive and rarely achieve their stated goals. Such policies impede growth, chill investment and — outside of commodities — are overwhelmingly paid for by the importing country. Even on trade deficits, the authors remind us, tariffs have historically had largely insignificant effects. While the evidence on tariffs and their effects on industrialization is more mixed, for every Japan or South Korea — which used barriers to turbocharge manufacturing in the postwar era — there are the smoldering examples of Brazilian personal computers or Indian autos.

So what good are trade barriers? Ms. Keynes and Mr. Bown aren't absolutists. They leave open the possibility of using tariffs to reduce critical dependencies in areas such as minerals, pharmaceutical ingredients or semiconductors. More useful to nurture important industries are tax credits, which increase productivity 10 times more than other industrial-policy tools such as grants and loans.

The authors argue for collective action wherever possible; when trade barriers are necessary, they advocate for erecting them with allies in tow — exactly the opposite of the Trump administration's approach. China brushed off Washington's elevated duties last year and redirected exports elsewhere. Unilateral technology-export controls risk backfilling by companies in Europe and Japan.

The collective economic heft of the West overmatches China. In "Command of Commerce" (2025), Ben Vagle and Stephen Brooks estimate, for example, that China's gross domestic product would take a short-run hit five to 11 times larger than the U.S. in a sharp decoupling between the West and China, but less than 1 1/2 times larger if the U.S. decouples from China alone.

If the question is "How to Win a Trade War," Ms. Keynes and Mr. Bown make a compelling — if indirect — case that the answer is to avoid the playbook recently used in Washington.

  • Mr. Bunzel is the head of Lazard Geopolitical Advisory. He has worked in the political section of the U.S. Embassy in Moscow and at the U.S. Treasury Department.