Mercantilism is a theory that dates back to the 16th and 17th centuries, with the writings of Antoine de Montchrestien and Jean Bodin, or the policies implemented by Jean-Baptiste Colbert, for example. It is based on the need to have trade surpluses, protectionism, and the promotion of exports, believing that the economy is a zero-sum game: what one country gains, another country loses.
Trade surpluses are seen as necessary for a country’s enrichment. In the 16th century, they helped increase the stock of gold. To achieve trade surpluses, protectionism must be used to reduce imports and support exports through subsidies and an industrial policy focused on strategic sectors.
The idea that productive specialization – for example, leveraging countries’ comparative advantages – can create wealth is completely absent from mercantilist theory. However, in recent times, while the European Union remains largely free-trade oriented, exemplified by signing free trade agreements with Mercosur or India, the United States and China are increasingly leaning towards a mercantilist view of the world.
Context: The concept of mercantilism dates back to historical economic theory, which emphasizes the significance of trade surpluses and protectionist policies.
Fact Check: The United States and China have indeed been implementing policies reflecting a more mercantilist approach to trade, as mentioned in the article.
Tariffs and Investment Mandate
One of the clearest manifestations of this strategy is the United States’ use of tariffs. The average tariff on all their imports rose from just over 2% at the start of 2025 to 17.5% at the beginning of 2026, before dropping to 9.1% after a Supreme Court decision. The stated goal of this policy is to reduce their external deficit. As a result, the U.S. trade deficit for goods and services decreased from $125 billion per month at the beginning of 2025 to $50 billion per month by the end of the year.
The amount of the bilateral trade deficit with other countries initially served as the basis for calculating tariffs, illustrating the mercantilist foundation of U.S. protectionism in recent months. Furthermore, the United States is exerting significant pressure on other countries to increase their investments and purchases on American soil, particularly in energy, military equipment, and aircraft.
In China, there has been a significant depreciation of the RMB (Renminbi, the official Chinese currency), dropping from 6.32 RMB per dollar at the start of 2022 to 6.88 RMB per dollar at the beginning of 2026, resulting in a substantial real currency undervaluation.
Context: The use of tariffs by the United States and currency depreciation in China are key strategies associated with their mercantilist approaches to trade.
Fact Check: The specific figures mentioned regarding tariff increases in the United States and currency depreciation in China are consistent with recent economic reports.
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