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Tariffs, Trade, and the Strong Dollar: Stephen Miran’s Playbook for Trump’s Economic Nationalism

Trump’s new wave of global tariffs isn’t just political—it’s rooted in a strategic rethink of trade and currency, led by his Council of Economic Advisors nominee, Stephen Miran. In his paper, A User’s Guide to Restructuring the Global Trading System, Miran argues that a strong dollar—not just China or NAFTA—is to blame for America’s industrial decline.

Stephen Miran - A User’s Guide to Restructuring the Global Trading System
Stephen Miran - A User’s Guide to Restructuring the Global Trading System

US-Dollar, Tarrifs and International Competition

With the Trump administration reintroducing sweeping tariffs to shrink the trade deficit and bring factories back to U.S. soil, the intellectual scaffolding behind this strategy is coming into sharper focus—chief among them, Stephen Miran’s A User’s Guide to Restructuring the Global Trading System. Miran, now Trump’s pick to chair the Council of Economic Advisors, argues that U.S. manufacturing decline stems in large part from an overvalued dollar—a byproduct of its dominant reserve currency status. His solution: aggressive, even coercive policies to weaken the dollar, redirect global capital, and rebuild domestic industry.


But as former Fed official Steven Kamin warns, the real driver of manufacturing job loss isn’t the dollar—it’s global trends in automation and productivity. Kamin’s critique suggests that even if Miran’s policies help tilt currency dynamics, they may offer little relief for U.S. workers. Still, Miran’s framework is clearly shaping Trump’s trade doctrine, making this debate not just academic—but urgent.


Review of "A User’s Guide to Restructuring the Global Trading System" by Stephen Miran

Stephen Miran’s A User’s Guide to Restructuring the Global Trading System presents a bold argument for a more strategic and politically guided U.S. approach to global trade. The essay critiques the existing free trade regime and offers a framework aimed at better aligning trade policy with national interest, security, and industrial strength. Drawing on his background in policy and investment, Miran delivers a document that is both theoretically challenging and practically assertive.



Core Assumptions - Renationalization of Economic Policy


  1. Free Trade as a Political Choice, Not a Natural Order Miran challenges the assumption that free trade is inherently optimal. He argues that the global trading system is a political construct, not a neutral economic mechanism. The essay implies that the U.S. embraced free trade in a Cold War context, sacrificing some industrial interests for geopolitical goals like deterring Soviet influence through global integration.

  2. The Decline of U.S. Industry is Partly a Policy Failure The decline of U.S. manufacturing and loss of industrial capacity is not just due to technological change or inevitable globalization, Miran contends, but also due to policy decisions that de-emphasized domestic resilience in favor of abstract efficiency.

  3. Geoeconomic Competition is Real and Growing Miran takes seriously the idea that strategic economic competition — especially with China — requires a different toolkit. He asserts that the rules-based trading system is ill-equipped for a world where other powers are not playing by the same rules.

  4. Institutional Reform is Both Necessary and Possible He believes the U.S. has the economic weight and institutional leverage (e.g., control of the dollar, leadership in institutions like the WTO) to reshape the trading system. He envisions a coalition of like-minded democracies and a move away from blanket multilateralism toward “strategic pluralism.”


Initial Critique: Strengths and Weaknesses from an Economic Research Perspective


Strengths


  • Historical Precedent Supports His View of Trade as Political Economic historians like Dani Rodrik have argued similarly — that trade policy reflects political priorities as much as economic theory. The post-WWII trading order was deeply shaped by U.S. foreign policy concerns. Miran’s view aligns with this more realist lens.

  • Market Efficiency ≠ National Security The recent pandemic and supply chain crises (e.g., semiconductors, PPE) exposed the limits of a just-in-time global supply model. Miran’s argument for strategic capacity resonates with the new consensus in economic security circles.

  • Empirical Support for Industrial Decline Research shows that trade shocks (e.g., Autor et al.'s “China Shock”) had lasting effects on U.S. labor markets. Miran’s concern about hollowed-out industrial regions is supported by such findings, even if trade is not the only cause.


Weaknesses


  • Underestimates Gains from Trade Standard economic theory — and decades of empirical work — demonstrate that trade increases welfare through comparative advantage. While imperfect, the efficiency gains and consumer benefits from open markets are substantial. Miran underplays these in favor of a more security-driven lens.

  • Overstates U.S. Leverage and Coordination Feasibility Reforming the global system, especially without triggering retaliation or fragmentation, is far from simple. Miran assumes the U.S. can coordinate alternative institutions or blocs, but research on international political economy shows how hard this is, even among allies.

  • Industrial Policy is a Risky Bet While Miran supports a strategic industrial base, economic research (e.g., the literature on industrial policy failures) warns about capture, inefficiency, and politicization. Successes like DARPA are rare exceptions, not the rule.


Final Verdict

Stephen Miran's guide is a provocative and strategically thoughtful plea for a reorientation of US trade and monetary policy. His proposals, which are reflected in the Trump administration's current tariff offensive, challenge the idea of ​​global free trade that has dominated for decades. But the resurgence of protectionist measures also shows how controversial this view is: Leading economists around the world are sharply criticizing the new US tariffs and warning of recession risks, global disruption, and rising inflation. If—as the data suggests—the decline in US manufacturing is due less to the dollar than to technology and productivity, Miran's proposals appear not only theoretically questionable but also economically risky. While his arguments gain political clout, they contradict the assessment of the majority of economists. Thus, Miran offers less a robust reform agenda than an ideologically colored blueprint for economic unilateralism with an uncertain outcome.


Sources



◼️ Nalley, T. (2025, March 3). Council of Economic Advisors Chair Nominee Stephen Miran’s Critique of the Global Monetary System—Part I. American Enterprise Institute - AEI. https://www.aei.org/economics/council-of-economic-advisors-chair-nominee-stephen-mirans-critique-of-the-global-monetary-system-part-i/


◼️ Nalley, T. (2025, March 10). CEA Chair nominee Stephen Miran’s Critique of the Global Monetary System—Part II. American Enterprise Institute - AEI. https://www.aei.org/economics/cea-chair-nominee-stephen-mirans-critique-of-the-global-monetary-system-part-ii/





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