America’s Economic Freedom Is Slipping—And Trade Barriers Are to Blame

Originally published on Substack. 

America used to be the world’s champion of free trade. After the disastrous Smoot-Hawley Act of the 1930s deepened the Great Depression, both Republicans and Democrats spent decades tearing down tariffs and opening markets. U.S. tariff rates averaged below 2% before President Trump raised them in his first term, helping fuel growth, opportunity, and prosperity at home and abroad.

But according to the Fraser Institute’s new Economic Freedom of the World: 2025 Annual Report, that legacy is in jeopardy.

​The Big Picture

The U.S. still ranks 5th overall in economic freedom, behind Hong Kong, Singapore, New Zealand, and Switzerland. But the details matter. America’s strength lies in property rights, sound money, and rule of law. The weakness? Trade freedom.

Chapter 2 of the report by Bob Lawson and Matt Mitchell shows that America’s ranking on freedom to trade has been eroding for two decades—dropping from 8th in 1995 to 56th in 2023. And if the new wave of tariffs continues, the U.S. could fall as low as 76th, dragging our overall ranking out of the global top 10 .

That isn’t just slippage—it’s a potential collapse of America’s leadership in economic freedom.

The Tariff Mirage

The Fraser team notes that tariffs now averaging 27.9%—levels announced in 2025—would put the U.S. just behind Iran on tariff policy . Think about that. The nation that built prosperity on open markets now risks joining the ranks of economies defined by state control and protectionism.

Tariffs don’t punish foreign exporters alone—they punish American families:

• Higher costs at checkout. From groceries to appliances, tariffs raise everyday prices.
• Job losses for exporters. U.S. farmers, energy producers, and manufacturers lose customers abroad when retaliatory tariffs hit.
• Lower wages and growth. Investment dries up when government distorts trade flows and shrinks global opportunity.

The so-called “booming” GDP numbers built on falling imports are a statistical illusion, not real prosperity. It’s an accounting trick that hides the damage tariffs do to family budgets and business opportunities.

Why It Matters Beyond Trade

The Fraser Institute is clear: trade freedom is a leading indicator. Once government clamps down on trade, other freedoms soon follow—more regulation, more subsidies, more political interference in the economy.

That’s exactly what we’re seeing. Tariffs invite lobbying, carve-outs, and crony deals. They give politicians more power to decide who wins and who loses. And they send a signal that government, not markets, is in charge of America’s economic future.

My Take

This is a wake-up call. If America wants to remain a global leader, it can’t afford to slip into the protectionist trap.

• ​Roll back tariffs. Free trade isn’t charity—it supports prosperity.

• Shrink government’s footprint. Sustainable budgets, not subsidies, should be the path to growth.
• Trust markets. Families and businesses—not bureaucrats—should decide what’s produced, traded, and consumed.

​The United States is still a free economy, but that freedom is fragile. If we continue down the path of tariffs and protectionism, we won’t just lose our place in the global top 10—we’ll lose the prosperity, opportunity, and freedom that made America exceptional.