Mercantilism is an economic doctrine that aims to accumulate wealth through trade surpluses and protectionist measures. Its roots can be traced back to 17th-century France under Jean-Baptiste Colbert, Louis XIV's Minister of Finance, before being widely adopted in the United States in the 19th century, where it had a lasting impact on trade, industry and employment.
Donald Trump's recent protectionist measures mark a resurgence of this doctrine in contemporary politics.
To fully understand the issues at stake in this new configuration, we will attempt to trace its influence in the United States, comparing its beginnings with Colbertist policies, exploring the era of customs tariffs, the shift towards free trade in the 20th century, the upheavals linked to China's entry into the World Trage Organisation (WTO) in 2001, and finally Donald Trump's current ambitions.
We draw on various publications on the subject, as well as recent statements by Scott Bessent, US Secretary of the Treasury, and Howard Lutnick, Secretary of Commerce in the Trump administration. The aim is to understand the extent to which mercantilism continues to influence the US and global economies and its potential impact on financial markets, between promises of industrial revival and risks of global tensions.
A look back at the foundations of mercantilism: from Colbert to Hamilton
Jean-Baptiste Colbert embodied the early days of mercantilism in 17th-century France. His ambition was to strengthen national power through high customs duties on imports and subsidies to domestic industries, such as textiles. At the time, this strategy enabled France to increase its gold and silver reserves, while laying the foundations for a more self-sufficient economy. Colbert's rigid but effective policies transformed the French industrial landscape.
A century later, in the early days of their independence, the United States adopted this approach to support its industrialisation. Thus, in 1789, the Tariff Act, introduced by Alexander Hamilton, the first Secretary of the Treasury, marked the beginning of this policy. Hamilton, convinced that domestic industry was essential to independence, imposed customs duties to protect manufacturers from British competition, while financing the government. He saw these measures as a means of transforming an agrarian economy into an industrial power. Under his influence, the United States maintained high tariffs throughout the 19th century, reaching nearly 50% in the late 1890s (with the McKinley tariffs). During this period, American industry flourished, employing more and more workers and laying the foundations for global economic power.
Unlike Colbert's policy in France, the United States' goal was less to accumulate precious metals than to build a solid industrial base. This pragmatism paid off, propelling the country to economic giant status at the dawn of the 20th century.
Read the entire article “Return of mercantilism: what are the impacts for the debt markets?”