While there are many reasons to be for or against the current administration’s tariffs, this impulse to invoke Reagan to criticize Trump can obscure significant overlap in each president’s strategic use of trade as a geopolitical tool. Revisiting the 1985 United States-Israel Free Trade Agreement (FTA) can illuminate these likenesses and convey several helpful lessons for policymakers today.

As a refresher, this agreement not only comprised the economic dimension of Reagan’s strategic integration of Israel into US defense planning but also marked the first bilateral free trade deal in US history. The initial idea was proposed in November 1983, formal negotiations began in January 1984, the pact was signed in April 1985, and it went into effect June 11, 1985. The FTA removed import fees on certain key goods, with all bilateral trade between the United States and Israel (including the Palestinian territories) becoming duty-free by 1995. Covering major sectors like agriculture, textiles, and manufacturing, the FTA overcame the resistance of US Arab allies and US domestic producers to become a template for future free trade agreements such as those with Canada and Jordan.

While the FTA and the trade agreements currently being negotiated by the Trump administration obviously take opposite stances on the question of tariffs, there are two key similarities in the strategic rationale informing them worth highlighting.

First, both the FTA and Trump’s deals are fundamentally driven by geopolitical calculations instead of purely economic considerations. Although Reagan is popularly known as an arch-conservative on questions of economic policy—Milton Friedman did serve as one of his advisors, after all—the 1985 FTA with Israel was motivated less by an adherence to free trade doctrine and more by fear that Israel’s economic woes were jeopardizing its military capacities. One economic study at the time aptly summarized Israel’s problems, noting that the inflation rate “hit 50% per annum in 1975 after the 1973 Yom Kippur War; was reduced to 30-40% by 1977; by the end of 1979 it was around 130% where it remained until the end of 1983; at the end of 1984 the price level was 5.5 times a year earlier.” Moreover, because Israeli debt was close to 80 percent of GDP, the government could hardly hope to stimulate a deficit-financed recovery on its own. In this context, the Reagan administration feared the Israeli economy might hamper its ability to remain militarily effective.

Although Trump’s policies are quite different, both his and Reagan’s FTA with Israel represent the primacy of geopolitical considerations in trade strategy. The Trump White House explicitly claims that its tariffs are meant to bolster US manufacturing in sectors vital to defense such as energy, aerospace, and steel. Reagan, in similar fashion, employed U.S. trade policy to prevent a crucial ally in a vital region from becoming too weak to contribute to American defense posture.

Second, both the FTA and Trump’s deals have been initiated as a response to US aid flows. As Andrew Pierre observed in 1982, US assistance and credits covered nearly half of the Israeli defense budget, which meant “the Israeli economy is very much dependent on the infusion of money from abroad.” The hope within the Reagan administration was that the FTA would enable Israel to transition to an export-driven economy, thus reducing the need for American aid.

In similar fashion, Trump’s trade negotiations have occurred alongside his push for NATO allies to increase their defense spending to the levels needed to deter Russian or Chinese aggression. In this case, the aim is to reduce allied dependence on the US military to protect the continent and promote the long-sought chimera of European self-reliance on matters of defense. In each case—the 1985 FTA and Trump’s dealings with Europe—the goal of US trade policy has been to cut the amount of US resources needed by allies and raise their contributions to collective security.

This dynamic means that Trump and Reagan both effectively deployed trade as a tool to force allies to commence with domestic reforms they would otherwise not pursue. For Israel, signing the FTA meant giving up its state-led economic structure in favor of a capitalist free market system. One casualty of this transition was Israel’s goal of developing its own fighter jet, the Lavi, signaling an acceptance of reliance on American-made weaponry that gives Washington powerful leverage over Israeli security policy. In the case of NATO allies, the promise to increase defense spending to 5 percent of GDP will necessarily entail cuts to other areas of government spending. Although generous European safety nets are already straining under the weight of the demographic crisis, to reach even 3 or 4 percent will demand hard choices; as John Letzing of the World Economic Forum shows, this transition requires NATO countries to “effectively retool their economies for this new reality.”

Ultimately, recognizing that both Reagan and Trump wielded trade policy not as an end in itself but as a strategic lever to bolster defense and compel allied burden‑sharing offers a corrective lens through which to evaluate today’s debates over tariffs, free trade, and national security.

Critics of Trump’s trade agenda often invoke the legacy of Ronald Reagan, the Republican icon of free markets. For example, Daniel C. Peterson at Patheos contrasts Reagan’s April 1987 radio address on free and fair trade to Trump’s “totally arbitrary tariff regime.” The Independent cites Reagan’s 1988 speech about the impending US-Canada Free Trade Agreement to the same effect. Many other commentators have made this comparison, including the Chinese embassy and a former Reagan advisor.

While there are many reasons to be for or against the current administration’s tariffs, this impulse to invoke Reagan to criticize Trump can obscure significant overlap in each president’s strategic use of trade as a geopolitical tool. Revisiting the 1985 United States-Israel Free Trade Agreement (FTA) can illuminate these likenesses and convey several helpful lessons for policymakers today.

As a refresher, this agreement not only comprised the economic dimension of Reagan’s strategic integration of Israel into US defense planning but also marked the first bilateral free trade deal in US history. The initial idea was proposed in November 1983, formal negotiations began in January 1984, the pact was signed in April 1985, and it went into effect June 11, 1985. The FTA removed import fees on certain key goods, with all bilateral trade between the United States and Israel (including the Palestinian territories) becoming duty-free by 1995. Covering major sectors like agriculture, textiles, and manufacturing, the FTA overcame the resistance of US Arab allies and US domestic producers to become a template for future free trade agreements such as those with Canada and Jordan.

While the FTA and the trade agreements currently being negotiated by the Trump administration obviously take opposite stances on the question of tariffs, there are two key similarities in the strategic rationale informing them worth highlighting.

First, both the FTA and Trump’s deals are fundamentally driven by geopolitical calculations instead of purely economic considerations. Although Reagan is popularly known as an arch-conservative on questions of economic policy—Milton Friedman did serve as one of his advisors, after all—the 1985 FTA with Israel was motivated less by an adherence to free trade doctrine and more by fear that Israel’s economic woes were jeopardizing its military capacities. One economic study at the time aptly summarized Israel’s problems, noting that the inflation rate “hit 50% per annum in 1975 after the 1973 Yom Kippur War; was reduced to 30-40% by 1977; by the end of 1979 it was around 130% where it remained until the end of 1983; at the end of 1984 the price level was 5.5 times a year earlier.” Moreover, because Israeli debt was close to 80 percent of GDP, the government could hardly hope to stimulate a deficit-financed recovery on its own. In this context, the Reagan administration feared the Israeli economy might hamper its ability to remain militarily effective.

Although Trump’s policies are quite different, both his and Reagan’s FTA with Israel represent the primacy of geopolitical considerations in trade strategy. The Trump White House explicitly claims that its tariffs are meant to bolster US manufacturing in sectors vital to defense such as energy, aerospace, and steel. Reagan, in similar fashion, employed U.S. trade policy to prevent a crucial ally in a vital region from becoming too weak to contribute to American defense posture.

Second, both the FTA and Trump’s deals have been initiated as a response to US aid flows. As Andrew Pierre observed in 1982, US assistance and credits covered nearly half of the Israeli defense budget, which meant “the Israeli economy is very much dependent on the infusion of money from abroad.” The hope within the Reagan administration was that the FTA would enable Israel to transition to an export-driven economy, thus reducing the need for American aid.

In similar fashion, Trump’s trade negotiations have occurred alongside his push for NATO allies to increase their defense spending to the levels needed to deter Russian or Chinese aggression. In this case, the aim is to reduce allied dependence on the US military to protect the continent and promote the long-sought chimera of European self-reliance on matters of defense. In each case—the 1985 FTA and Trump’s dealings with Europe—the goal of US trade policy has been to cut the amount of US resources needed by allies and raise their contributions to collective security.

This dynamic means that Trump and Reagan both effectively deployed trade as a tool to force allies to commence with domestic reforms they would otherwise not pursue. For Israel, signing the FTA meant giving up its state-led economic structure in favor of a capitalist free market system. One casualty of this transition was Israel’s goal of developing its own fighter jet, the Lavi, signaling an acceptance of reliance on American-made weaponry that gives Washington powerful leverage over Israeli security policy. In the case of NATO allies, the promise to increase defense spending to 5 percent of GDP will necessarily entail cuts to other areas of government spending. Although generous European safety nets are already straining under the weight of the demographic crisis, to reach even 3 or 4 percent will demand hard choices; as John Letzing of the World Economic Forum shows, this transition requires NATO countries to “effectively retool their economies for this new reality.”

Ultimately, recognizing that both Reagan and Trump wielded trade policy not as an end in itself but as a strategic lever to bolster defense and compel allied burden‑sharing offers a corrective lens through which to evaluate today’s debates over tariffs, free trade, and national security.