Jamison Greer of the Office of the United States Trade Representative (USTR) underscored the legitimacy of the tariff policy pursued by the Donald Trump administration and argued that government intervention lies behind how resource-scarce South Korea became a global steel producer.

In an article titled ‘Trade Theory Must Catch Up With Tariffs, Industrial Policy, and the Costs of Globalization’ contributed to the June issue of the International Monetary Fund (IMF) Finance & Development magazine, Greer criticized the post-1990s idea that “If all countries eliminate trade barriers worldwide, would that not be better for everyone?” as “the simple logic of hyperglobalization.”

He stated that under the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade Organization (WTO) launched in 1995, tariffs were essentially designed to protect national security and domestic industry, respond to unfair competition and promote economic development, and address balance-of-payments problems. He then argued that while the WTO principle of most-favored-nation treatment was “expected to bring peace and prosperity, in reality it made multinational corporations roam the world in search of subsidies and lax labor and environmental regulations.”

He also criticized the principle of comparative advantage, often cited in support of free trade. Comparative advantage is the economic principle that when countries specialize in goods they can produce at a relatively lower opportunity cost and trade, both can raise their total output and consumption. He said that “it is certainly true that specialization improves efficiency,” while insisting that “economics today must explain a reality in which economies of scale combined with government intervention create structural trade imbalances unrelated to comparative advantage.”

Citing South Korea as an example, he asked, “Why does the United States, which has the most fertile farmland, run an agricultural trade deficit, and how did South Korea, which lacks energy resources and has little coal or iron ore, become a leading steel producer?” He argued that state economic intervention has distorted the global economy by making some countries persistent deficit countries and others persistent surplus countries.

Greer pointed out that under roughly three decades of a free-trade regime, Americans had to grow disillusioned as they watched high-quality jobs move overseas. He said, “By the time President Trump first took office, the gap between theory and reality had reached a point that could no longer be ignored,” adding, “Millions of high-quality manufacturing jobs were lost, and more than 70,000 factories closed. Working-class wages stagnated and the industrial base weakened.”

Following a U.S. Supreme Court ruling in February that invalidated reciprocal tariffs, the Trump administration has been imposing a 10% ‘global tariff’ on trading partners worldwide based on Section 122 of the Trade Act. Under Section 122, the global tariff has a 150-day levy period. To introduce new tariffs before the period expires in July, the USTR is conducting Section 301 investigations against major countries.

Section 301 authorizes the U.S. president to take retaliatory measures such as imposing uncapped tariffs and import quotas in response to discriminatory and unreasonable practices by foreign governments that burden or restrict U.S. trade. Greer said in a CNBC interview that the announcement of the results of the Section 301 investigations covering dozens of countries, including South Korea, will come within a few weeks.