Trade policy is set by domestic political bargaining between globalists and protectionists, representing owners of factors specific to export and import-competing sectors respectively. Consistent with the post-Civil War Era of Restriction, protectionists implement high tariffs when status quo...

We analyze major transitions in U.S. trade policy using a two-factor, two-good, two-country model, where domestic policy is the outcome of political bargaining between two parties representing each factor owner—globalists and protectionists. The dominant party sets the agenda, but parties must...