The Costs of Protectionism: Professor Walid Hejazi on Trump's Tariff Policy, Economic Instability, and the Global Market

In his return to office, President Donald Trump has intensified the use of tariffs as a central instrument of U.S. trade policy. Recent measures have expanded tariffs on strategic imports, particularly from China, and continued the application of steel and aluminum tariffs under Section 232 of the Trade Expansion Act, as well as broader sanctions under Section 301 investigations into intellectual property practices. These policies have been positioned as efforts to protect national industries, reduce trade deficits, and bolster American economic sovereignty, while also signaling a more assertive U.S. approach to global commerce.

Despite these intentions, the structure and execution of these tariff measures have introduced volatility into global markets. Empirical analyses indicate that while select domestic sectors have experienced short-term benefits, overall economic costs—including higher input prices, retaliatory tariffs from trading partners, and dampened investment—have offset many of the perceived gains. International institutions such as the IMF and WTO have linked prolonged tariff conflicts to downward revisions in global growth projections. Financial markets, in turn, have exhibited heightened sensitivity to tariff escalations, reflecting broader uncertainty about the sustainability of current trade policies.

This episode examines the evolving nature of American trade strategy: What distinguishes short-term political signaling from durable economic policymaking? How have Trump’s tariffs reshaped global supply chains, investor confidence, and the strategic positioning of U.S. industries? And as financial markets demand greater predictability and resilience, what future pathways could be pursued to align tariff and fiscal policy with long-term competitiveness and global stability?

Our special guest this week is Professor Walid Hejazi. Professor Hejazi is the Academic Director of Executive Programs and Professor of International Business, Economic Analysis, and Policy at the Rotman School of Management at the University of Toronto. He is also a Fellow at the Michael Lee-Chin Family Institute for Corporate Citizenship and serves on the Board of Directors of the David & Sharon Johnston Centre for Corporate Governance Innovation.

Over the course of his career, Professor Hejazi has advised private-sector firms and collaborated extensively with Canadian and international governments on foreign investment and international trade strategy. He has testified before parliamentary and senate committees, taught extensively in Rotman's MBA, EMBA, and executive education programs, and delivered lectures in over 30 countries worldwide. His research focuses on the intersection of global competitiveness, trade dynamics, and strategic economic policy, making his insights particularly timely for today’s conversation.

Join us as we delve into the consequences of tariff-driven protectionism, the gaps in America's current trade approach, and what more sustainable, market-stabilizing policies could look like in the years ahead.

Produced by: Julia Brahy