The Foreign Affairs Interview

Episode: The World That Tariffs Will Make
Date: September 11, 2025
Host: Daniel Kurtz-Phelan
Guest: Michael Froman, President of the Council on Foreign Relations and former U.S. Trade Representative

Overview of the Episode

This episode tackles the seismic global changes unleashed by the United States’ recent sweeping tariffs under President Trump’s second term. Host Daniel Kurtz-Phelan sits down with Michael Froman (former USTR, now CFR president) to explore the end of the old global trading order, the roots of protectionist backlash, and what a future "beyond nostalgia" for globalization might look like. With sharp analysis, Froman calls for realism: the rules-based system as we knew it is gone, and only serious political, economic, and multilateral adaptation will keep chaos at bay.

Key Discussion Points & Insights

1. The Death of the Old Order: No Going Back

• Froman’s main thesis: the global trading system of the post-WWII era has been “fatally compromised”—there’s “no going back.” The “toothpaste is out of the tube.” ([00:05], [48:19])
• Trump’s tariffs and China’s assertiveness are symptoms and causes of this rupture. Even if elements of the old order survive, the system is now fragmented.
• Nostalgia is not a strategy—what’s required is inventing a new set of rules for a changed global reality ([00:05]).

Quote:

“I think there's no going back. The toothpaste is out of the tube.”
— Michael Froman [00:05], [48:19]

2. How We Got Here: Technology, Policy, and Over-Burdened Trade Debates

• Trade policy has received both “more credit and more blame than it deserves.” Technological innovation—like shipping containers and broadband—drove globalization far more than trade agreements themselves ([01:58], [02:49]).
• Many ills attributed to trade policy (job loss, regional decline) are actually the results of technological change and global integration, not just “bad trade deals” ([02:49], [05:35]).

Quote:

“A lot of the things that people associate with trade is really about technology and the dynamism of globalization, which by the way continues.”
— Michael Froman [02:49]

3. Trade as Scapegoat: The Real Failures

• Froman concedes the old trading system did not adequately cushion those adversely impacted by globalization—e.g., factory and manufacturing worker displacement ([05:35]).
• The U.S. failed to pair trade policy with robust domestic measures for retraining and lifelong learning, leaving many workers vulnerable to disruption ([05:35]).

Quote:

“We never accompanied trade policy with a sufficiently robust set of domestic policies designed to ensure that American workers would be able to survive and thrive in a rapidly changing economy.”
— Michael Froman [05:35]

4. China and the Collapse of WTO Assumptions

• The existing trade system was not designed for a player as large, state-directed, and non-convergent as China ([10:41]).
• Early optimism that China would fully embrace market reforms proved unfounded, especially under Xi Jinping ([10:41], [13:19]).
• U.S. attempts to press China for reform were consistently rebuffed. China benefited immensely from a benign global environment but didn’t reciprocate with reciprocal openness ([13:19], [16:36]).

Quote:

“There were several areas where I don't think the global system anticipated the nature of the China challenge… One thing we did not anticipate was that trajectory would not necessarily be linear.”
— Michael Froman [10:41]

5. Adopting China’s Playbook: Protectionism, Industrial Policy and State Capitalism

• The U.S. is “now operating largely in accordance with Beijing standards”—industrial policy, subsidies, and state intervention ([17:49], [18:43]).
• Froman supports some targeted interventions in sectors tied to national security—like semiconductors—but warns against an endless, unstrategic expansion of government role in the economy, which can become a slippery slope ([18:43], [23:20]).

Quote:

“It's a bit of a Pandora's box. Once you say, okay, the government is going to begin to play this role in the economy, where do you stop?”
— Michael Froman [18:43]

6. National Security and Economics: A Shifting Center of Gravity

• Froman notes a tectonic shift where national security frameworks increasingly determine economic policy; this is symbolized by the Biden administration’s National Security Advisor delivering the top economic policy speech ([21:15]).
• The challenge: defining national security tightly enough to avoid “endless expansion of the yard.” ([22:57], [23:20])

Quote:

“We need to think through national security through an economic lens. We need to think through economic policy through a national security lens.”
— Michael Froman [21:45]

7. Trump’s Tariff Revolution: Global and Market Responses

• The world has been surprised by how markets and other nations have absorbed sharply higher U.S. tariffs; the average tariff is now about 16–17%, up from 2.5% ([29:56]).
• So far, inflation and job loss have not been catastrophic, but Froman cautions that time lags may still reveal harsher effects ([29:56], [32:25]).
• Other countries have been less retaliatory than expected, partly due to Trump’s threats of escalation, and partly because of targeted leverage by China ([33:58]).

Quote:

“We are five, six times the tariff levels we were before. And I think that surprises me that the markets have absorbed that… The market impact has been positively complacent and we'll see how that plays out over time.”
— Michael Froman [29:56]

8. Risks of Contagion and Systemic Breakdown

• If the U.S. and China pursue a “two-player system,” the risk is global contagion: other countries will abandon multilateralism and embrace ad hoc, self-interested barriers ([37:46], [38:23]).
• Froman warns this could lead to a “downward spiral” toward chaos and possibly conflict, reminiscent of the unstable interwar decades ([38:23], [39:59]).

Quote:

“The darkest scenario is that we end up back in sort of a Hobbesian state of nature where every country is doing their own thing at the expense of the others, driven by domestic pressures and politics.”
— Michael Froman [38:23]

9. A New Mercantilist Order? Trump’s Strategic Vision and Its Limits

• Trump’s advisors see tariffs as a way to force manufacturing back to the U.S. because of the market’s size ([43:15]).
• Froman doubts tariffs alone can deliver this outcome, referencing limited steel job growth and greater downstream job losses from past tariffs ([46:41]).
• The cost of tariffs is immediate and widespread, while any manufacturing recovery is lagged and limited to certain sectors ([43:15]).

Quote:

“The cost of tariffs are going to be felt by everybody… And the benefits, if they're right, that by putting up a wall of tariffs, we're going to increase manufacturing in the United States. That benefit is going to be felt four, five, eight years from now by a relatively small number of workers in a relatively small number of sectors.”
— Michael Froman [43:15]

10. The Survival of Rules: Beyond Nostalgia and Toward Plurilateralism

• Froman asserts it is crucial to maintain some form of predictable rules, even if multilateralism in its old form is gone ([49:20]).
• Suggests future systems may rely on “plurilateral” agreements—smaller groups of countries with shared standards and open frameworks ([50:39]).
• This system may not be as economically optimal in textbook terms, but could be more resilient and politically sustainable ([51:09]).

Quote:

“Some degree of rules… even if you can’t get rules that apply to everybody… groups of countries can come together plurilaterally and agree to rules that they’re willing to live by… That may be a second best, but still a better solution than chaos and anarchy.”
— Michael Froman [49:44], [50:39]

Notable Memorable Moments & Quotes

• “Nostalgia is not a strategy.” — Michael Froman [00:05], [48:19]
• “Trade policy has gotten both more credit and more blame than it deserves…” — Daniel Kurtz-Phelan quoting Froman [01:58]
• “We never accompanied trade policy with a sufficiently robust set of domestic policies designed to ensure that American workers would be able to survive and thrive in a rapidly changing economy.” — Michael Froman [05:35]
• “We're now at about 16, 17% [tariffs]. And we'll have to see where this lands because there are a lot of other trade cases currently going through the system which could raise tariffs in particular sectors even further.” — Michael Froman [29:56]
• “The risk is that Europe turns inward. The major emerging economies… turn inward. And suddenly you see sort of a downward spiral of disintegration, of deintegration of the global economy.” — Michael Froman [38:23]
• “Even if the rest of the world continues to try and support the system, it’s going to affect a smaller and smaller portion of global trade.” — Michael Froman [48:19]
• “That may be a second best, but still a better solution than chaos and anarchy.” — Michael Froman [50:39]

Timestamps for Important Segments

• Introduction & Old Order’s Demise: [00:05]–[02:49]
• The Limits/Blame of Trade Policy: [05:10]–[08:35]
• System Design Flaws with China: [09:45]–[13:19]
• China’s Intransigence & the Global Response: [16:26]–[18:43]
• Industrial Policy & National Security: [21:15]–[23:20]
• Trump’s Tariffs — Market Response & Complacency: [29:56]–[32:25]
• Lack of Retaliation and Global Contagion Risk: [33:58]–[39:59]
• Trump’s New System — Can It Work?: [43:15]–[46:41]
• Plurilateralism as the Next Best Hope: [49:20]–[52:39]

Conclusion

Froman and Kurtz-Phelan offer a sweeping, candid assessment of the collapse of the old global trading order and the uncertainty of what will replace it. While acknowledging both the failures of the old system and the impracticality of going back, Froman warns against both nostalgia and chaos—urging instead for adaptive, realistic cooperation centered around rules, even if less universal, and persistent U.S. engagement and leadership to prevent a world sliding toward destructive economic fragmentation.