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Talking Economics: Can Tariffs Make a Country Stronger?

23 October, 2026

CERGE-EI's Talking Economics podcast welcomes new host Andrew Gardiner, bringing fresh economic perspectives to a wider audience. In the latest episode, Gardiner speaks with Oleg Itskhoki, Professor of Economics at Harvard University and recipient of the 2022 John Bates Clark Medal.

Their conversation explores the consequences of tariffs and trade policies, the changing global economic order, and the economic challenges facing the United States and Europe. They also discuss Russia's war in Ukraine, the limits of economic sanctions, and the role of defence spending in preventing conflict.

As we welcome our new host, we would also like to express our sincere thanks to CERGE-EI alumna Katarína Stehlíková for her contribution to Talking Economics. Her thoughtful conversations with faculty members and researchers have helped establish the podcast as a platform for sharing economic knowledge and ideas with a wider audience.

Can Tariffs Make a Country Stronger?

Can tariffs protect domestic industries and jobs, or do they ultimately leave everyone worse off? Itskhoki explains the prisoner's dilemma of international trade: while individual countries may benefit from imposing tariffs, widespread retaliation can lead to an outcome that is worse for all.

"There are simple arguments why tariffs are good as long as nobody else does them. But everybody has that argument."

The discussion examines US trade policy, competition with China, and the changing role of the World Trade Organization (WTO). Itskhoki also highlights the less obvious consequences of tariffs: currency appreciation can make exports more expensive, reducing international competitiveness. As he puts it, "A tariff is a tax on all trade."

War, Economic Sanctions, and the Cost of Defence

Turning to Russia's war in Ukraine, Itskhoki draws on his research into Western sanctions to explain why financial restrictions alone did not trigger the anticipated economic crisis in Russia. He emphasizes the importance of combining financial sanctions with measures targeting export revenues, while acknowledging the limits of economic tools in addressing military aggression.

The conversation also explores the economics of deterrence. Itskhoki argues that although defence spending diverts resources from other priorities, insufficient military investment can increase the risk of war — with far greater human and economic costs.

"If you do spend, the war might not happen in equilibrium."

He reflects on Europe's reliance on the United States for security and offers a personal perspective on the war's long-term consequences. While expressing confidence that Ukraine will recover and rebuild, he raises difficult questions about Russia's future and its ability to come to terms with the war.

From Research to Public Debate

The episode also addresses growing government debt, fiscal challenges, and inequality between generations as populations age, illustrating how economic research can shed light on difficult policy choices.

Oleg Itskhoki visited CERGE-EI in Prague to deliver a John Bates Clark Medal Talk, presenting his research paper The Optimal Macro Tariff. His appearance on Talking Economics offered an opportunity to bring his research and insights to a broader audience.

Listen to the full episode of Talking Economics with Oleg Itskhoki

Listen also to the Seznamzpravy.cz podcast 5:59 with Oleg Itskhoki