The shipyards of Hampton Roads have long been the pride of American industry — steel giants rising along the water, powering not just the U.S. Navy but the regional economy of coastal Virginia. But President Donald Trump’s decision to impose a 25% tariff on imported Canadian steel and a 25% tariff on aluminum threatens to rust the very foundation of this legacy. While framed as a “pro-America” policy, these tariffs reveal a fundamental misunderstanding of the modern economy — and a complete disregard for the lessons Adam Smith tried to teach us nearly 250 years ago.
In “The Wealth of Nations,” Smith famously wrote, “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.” This is not just homespun common sense; it’s the foundation of economic specialization. And it’s precisely what’s being ignored in this latest round of tariffs.
Hampton Roads’ shipbuilding industry doesn’t operate in a vacuum. It relies on a complex supply chain, from raw materials to precision components, many of which are sourced globally. Steel and aluminum from Canada — our close ally and trading partner — are critical for both military and commercial shipbuilding projects. Imposing tariffs on these imports doesn’t “protect American jobs”; it punishes them.
By raising costs on essential inputs, these tariffs squeeze the margins of firms like Huntington Ingalls Industries, which builds aircraft carriers and submarines under long-term defense contracts. These projects aren’t easily renegotiated to account for sudden price increases. What’s more, the higher costs are likely to ripple outward, impacting subcontractors, small fabricators and hundreds of local suppliers that form the industrial ecosystem in Hampton Roads. Huntington Ingalls alone employs over 25,000 people in the region — jobs now placed under pressure by rising input costs.
And for what? Canada has the absolute advantage in producing certain grades of steel and aluminum — meaning it can produce it more efficiently and at a lower cost than we can domestically. As Smith wrote, “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them.” The gains from trade are mutual, and the logic of comparative advantage still holds.
Unfortunately, Trump’s tariff-first approach echoes one of the darkest chapters in U.S. trade history: the Smoot-Hawley Tariff Act of 1930. While that law blanketed a wide array of goods with protectionist levies, the economic outcome was devastating. It triggered retaliation from trading partners, led to a collapse in global trade and deepened the Great Depression. While today’s tariffs may not be as sweeping in scope, the underlying logic — and potential fallout — remain eerily similar.
Targeting specific sectors like steel and aluminum creates bottlenecks in other critical industries, from construction to transportation to defense. Unlike the 1930s, today’s economy is deeply interconnected — so tariffs hit harder and ripple farther. A pinch in one sector can cascade across dozens of others. In Hampton Roads, that could mean slower production, contract delays and, ultimately, job losses.
Trump likes to position tariffs as a tool to “level the playing field.” But economics doesn’t care about political slogans. Tariffs are taxes, plain and simple. They distort markets, reduce efficiency and hurt consumers and workers alike. Smith’s vision of specialization and voluntary exchange leads to growth and prosperity. Protectionism, on the other hand, leads to inefficiency and decline.
Consider this: If Canada can produce raw aluminum more cheaply, and the U.S. can specialize in high-end shipbuilding, it makes sense for both countries to trade. That’s how modern economies thrive — by focusing on their strengths and relying on partners for the rest. Instead, Trump’s policy tries to rewind the clock to an era when nations built everything domestically, regardless of cost. That world is gone, and rightly so.
As Smith put it, “The division of labor is limited by the extent of the market.” By closing ourselves off to trade with trusted partners, we shrink that market — and in doing so, we shrink our own potential. The shipbuilders in Hampton Roads know this better than most. They compete globally, source materials intelligently and deliver excellence. Handicapping them with politically motivated tariffs is like making them build ships with one hand tied behind their back.
The genie is already out of the bottle when it comes to global trade. Supply chains stretch across continents, and no nation, not even the U.S., can go at it alone. Rather than fighting against this reality, we should embrace it — and trade with our partners accordingly. Canada is not our adversary. It is our neighbor, our ally and, in many cases, our most reliable source of critical materials.
If we want the shipbuilding industry in Hampton Roads to thrive — not just survive — we must heed Adam Smith’s wisdom and resist the siren call of protectionism. Trade isn’t a threat; it’s the engine of prosperity.
And like the ships we build, it moves only when we stop anchoring it to the past.
Thomas Fellows is a workforce commentator on how AI will affect the workforce/education systems, how higher education relates to workforce readiness and on labor unions. He is the founder and principal of CommenceAI, an AI strategy consultancy.