Tribalism Meets Economic Policy

Tariff frenzies prop up dying industries

5 min readJun 5, 2025

The tariff labyrinth morphed into a prison of loyalties, where tribal instincts trumped rational policy.

Tribal Psychology and Diplomatic Collapse

When protectionism taps in-group certainties, it ignites primal fear: “Our jobs versus their prosperity.” National identity becomes currency in a zero-sum spectacle (University of Cambridge, 2025). Tariffs stoke tribal fervour by portraying foreign competitors as existential threats, reducing complex interdependence to cartoonish enemies. In Denmark’s 2025 response to U.S. steel duties, a coalition of EU nations retaliated not merely for economic reasons but to defend collective sovereignty (Hogan Lovells, 2025). Leaders who invoke defensive pride — “We’ll show them” — weaponise tribalism over reason, turning policy into symbolic theatre.

Diplomatic channels collapse because tariffs dehumanise international partners. Negotiations degrade into gladiatorial combat: concessions become betrayals, compromises reveal weakness. Rome’s emperors would recoil at a senate tearing itself apart over tariff schedules, yet modern democracies behave as if immune to such tribal mania. When Ottawa imposed 50% duties on U.S. steel, ministers feigned moral victory while Saskatchewan farmers watched their markets evaporate overnight (U.S. Department of Agriculture, 2024). Retaliatory measures reinforce us-against-them narratives, emboldening hardliners and deepening division.

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Diplomatic Fallout: A House of Cards

Diplomatic relations crumbled as tit-for-tat tariffs spiralled. China’s 125% counter-duties on soybeans destroyed the fragile web connecting Midwest producers to global markets (U.S. Department of Agriculture, 2024). What started as a display of “strength” revealed itself as fragile egotism: a house of cards collapsing under its own weight. Each retaliatory round punished innocent bystanders: Asian importers found American pharmaceuticals suddenly costly (FDA, 2025), and European furniture buyers paid an extra $287 per year for chairs (Bureau of Labor Statistics, 2025). Does punishing consumers really signal prowess? Or does it betray a leader more interested in spectacle than substance?

Diplomatic folly blooms when light-weight leaders mistake theatricality for policy.

Tariffs masquerade as hard power but reveal deep insecurity, like a pantomime general brandishing an unloaded weapon. If foreign partners are reduced to enemies, how can alliances endure? NATO’s 2025 summit saw hushed side conversations about U.S. reliability amid tariff tensions (Reuters/IPSOS, 2025). Does mutual defence matter when trade agreements falter? When trade ministers in Brussels convened emergency meetings, they admitted tariff-induced mistrust spread faster than any virus. There is nothing left of transatlantic unity but hollowed out bone if the marrow of economic cooperation is sucked out first.

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Three Steps to Escape

Escaping the tariff prison demands a radical shift in mindset, diplomatic practice, and policy design.

1. Reframe Economic Narratives
Tariffs thrive on fear; we must replace fear with shared prosperity. Governments should communicate interdependence like actors in a good stage play, not a boxing match. When U.S. leaders claim to “protect” manufacturing, they ignore that global value chains already fragment production across continents. Ask yourself: does nostalgia for assembly lines justify modern economic realities? Public discourse must foreground collaboration over confrontation, emphasising how cooperation can yield higher living standards than isolation (International Monetary Fund, 2024).

2. Rebuild Trust Through Binding Agreements
Order requires enforceable commitments, not empty rhetoric. The EU’s Carbon Border Adjustment Mechanism sets a precedent: a legally binding framework that aligns economic incentives with broader goals (European Parliament, 2023). Why not adopt similar mechanisms for trade? Establish transparent dispute-resolution protocols — third-party arbitration immune to political theatrics. When Canada and the U.S. crafted the USMCA, they tethered trade policy to labour and environmental standards, making withdrawal politically costly (Peterson Institute for International Economics, 2025). Binding agreements force leaders to consider downstream consequences before imposing tariffs.

3. Cultivate Societal Resilience Against Tribalism
No policy survives without public support. Citizens must reject tribal impulses that glorify tariff-driven division. Educational programmes should unpack cognitive biases — confirmation bias, in-group favouritism, negativity bias — that fuel protectionism. If communities understand how tribal psychology drives destructive tariffs, they can demand rational debate instead of melodramatic posturing. Grassroots campaigns can highlight real-world trade benefits: a Midlands auto-parts supplier thriving because of cross-border inputs, not victimised by foreign “enemies.” When citizens perceive tariffs as self-inflicted wounds, political pressure to maintain them will recede.

Order must be reclaimed from the chaos of tribalism and diplomatic collapse.

By reframing narratives, fortifying agreements, and cultivating societal resilience, nations can transform trade from a brutal contest into a shared endeavour. Only then will we escape the tariff labyrinth and unlock genuine, long-term prosperity.

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References

Bureau of Labor Statistics. (2025). Consumer price index: Furniture and bedding. https://www.bls.gov/cpi/
European Parliament. (2023). Study on Social Media Platforms and Democracy (IPOL_STU(2023)743400_EN).
FDA. (2025). Insulin import tariff implementation. https://www.fda.gov/
Hogan Lovells. (2025, April 8). China’s comprehensive retaliation against U.S. tariffs. https://www.hklaw.com/en/insights/publications/2025/04/chinas-comprehensive-retaliation-against-us-tariffs
International Monetary Fund. (2024). U.S. dollar dominance in global trade. https://www.imf.org/en/Publications
Peterson Institute for International Economics. (2025). Downstream impacts of steel tariffs. https://www.piie.com/research/ongoing-projects
Reuters/IPSOS. (2025). Global trust in international alliances survey. https://www.ipsos.com/en-us
U.S. Department of Agriculture. (2024). Soybean export statistics. https://www.usda.gov/
University of Cambridge. (2025). Tribal psychology in economic decision-making [Working paper]. https://www.cam.ac.uk/research