Joseph Chamberlain, Donald Trump and their shared belief in the priceless secret of tariffs

During 2025, the University of Birmingham is celebrating 125 years of the granting of its Royal Charter. This university has made many important societal contributions to addressing local, national, and global challenges. When I reflect on this university, one association is with Joseph Chamberlain (1836-1914) and the role he played in its establishment.

Chamberlain was the first industrialist to enter the highest sphere of British politics. His contribution to the UK is especially important as his business was in what was then the workshop of the world, amongst Birmingham’s important metal-manufacturing ecosystem. As a local politician he transformed Birmingham through the implementation of radical policies that reconfigured the city’s approach to the provision of critical infrastructure, and this includes gas, water, spatial planning and education.

Chamberlain was a complex individual. Britain’s traditional elite admired his energy and strength of purpose, but they “detected a lack of grace; they sensed the cinder and soot of industry clinging to him” and Chamberlain’s “commitment was always to enterprise rather than to a [political] party”. To Disraeli, Chamberlain was “no gentleman. He has the manners of a cheesemonger”. Chamberlain was considered to be a difficult political colleague who was “as touchy as a schoolgirl and as implacable as Juno”.

Donald Trump, 45^th and 47^th U.S. President, has much in common with Chamberlain. Trump’s background is in property development and investment rather than politics. There is another commonality; Trump like Chamberlain is a protectionist. To Trump the word “tariff is the most beautiful word in the dictionary”. Trump could be quoting Chamberlain. In April 1902 whilst leaving a dinner Chamberlain stated that "You young gentlemen have entertained me royally, and in return I will give you a priceless secret. Tariffs! They are the politics of the future, and of the near future. Study them closely and make yourself masters of them, and you will not regret your hospitality to me”.

Chamberlain was concerned with the realignment that was occurring during the early years of the 20th century as the U.S. and Germany emerged as major powers to challenge the British Empire. To Chamberlain the solution was tariffs that would favour trade within the British Empire and generate tax revenue to support public policy implementation. This led to the creation of the Tariff Reform League in 1903. This was a protectionist British lobbying group established to protest about unfair imports and to advocate a trade policy based on imperial preference. The ambition was to transform the British Empire into a single trading bloc with the League’s moto being “Each for all and all for each”.

Today, Trump is applying Chamberlain’s approach to trade protectionism. The difference between Chamberlain and Trump is that Chamberlain never became prime minster and failed to persuade the UK government to embrace protectionist policies. However, a limited form of trade protectionism was introduced in 1932 across the British Empire as part of the Ottawa Agreements. This imperial preference strategy was configured around the principle of “home producers first, empire producers second, and foreign producers last".

Given Trump’s focus on tariffs it is ironic that the protectionism that was introduced with the Ottawa Agreements was dismantled at the insistence of the U.S. government in 1941. Article VII of the 1941 Lend-Lease Agreement recognised that protectionism worked against economic expansion and that such expansion was the “material foundations of the liberty and welfare of all peoples” and this required “the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers”.

Critiques of Chamberlain’s imperial preference policy argued that protectionism would increase prices. At this time, the argument was centred on food prices and bread. The UK had previous experience of food-related tariffs as the Corn Laws were enforced between 1815 and 1846 and these were intended to block the import of cheap cereal grains into the UK.

Tariffs are a very crude economic tool as they are bidirectional; they have negative impacts on exporting and importing countries. Jobs will be destroyed in exporting countries, and this dampens demand for imports provided by the country imposing tariffs. Prices rise for the country imposing tariffs. All this is well-known; tariffs are bad for growth.

Trump is working on two principles. On the one hand, threatening to impose tariffs encourages targeted countries to alter policies to try to deter Trump from following through on his tariff threat. On the other hand, Trump is trying to encourage reshoring of production. On 12 March 2025, Trump highlighted the case of Ireland and American pharmaceutical companies when he stated that Ireland “has got the entire US pharmaceutical industry in its grasps”. However, Trump overlooks the fact that an Irish location provides these companies with access to the EU single market as well as access to a highly skilled workforce.

Tariffs are easy to impose but have perverse impacts. The alternative is much more challenging, and this involves developing an environment that is supportive of job makers, and which encourages firms to form, grow, innovate, and compete. Of course, Trump could be radical and enter negotiations with the European Commission for the U.S. to join the EU. Just imagine the economic benefits that would come from the formation of such a large single market.

It is worth reflecting on legacies. What will Trump’s legacy be in 125 years’ time? There might be no legacy apart from historical narratives. This is not the case for Chamberlain, whose memorial is like that of Christopher Wren, architect of St Paul’s cathedral. On Wren’s tomb in St Paul’s Cathedral there is the epitaph “Lector, si monumentum requiris, circumspice” which is translated as “Reader if you wish to see his memorial, look around you”. One of Chamberlain’s legacies is the University of Birmingham, and I would encourage all readers to reflect on the multiple contributions that this university has made locally, nationally, and globally.