The word “tradeoff” means giving up some desirable attribute, like fuel efficiency, in order to gain another one, like crash safety. It comes from the phrasal verb “trade off”, which means the same thing. But is this sense of “tradeoff” metaphorical or literal?
This is not as simple a question as it may seem. “Trade”, taken literally, means to give another person something and receive something in return: commerce or barter. That’s not what’s happening in a “tradeoff”, so it would seem to be metaphorical.
But you can’t use “tradeoff” to describe literal commerce or barter. You can’t say this:
*I met Billy at the park for a tradeoff of my bicycle for his clothes iron.
“Tradeoff” just doesn’t have that sense.
Furthermore, it turns out that it isn’t the literal sense of “trade”, either. Or at least it wasn’t. Douglas Harper’s wonderful Etymonline tells me that what we now think of as the literal sense of “trade” was a sort of metaphorical or extended sense, at which point the literal meaning of “trade” was to occupy your time in something, such as milling flour. It’s not quite clear when it acquired this new metaphorical sense of bartering; it was definitely established as a verb by the 18th century CE, but as a noun it is attested as early as the 16th century CE.
But that wasn’t the original literal meaning of “trade”, either. To call milling flour a “trade” was a metaphorical extension of the literal 16th-century-CE meaning of “trade”, which was “a path”, or as a verb, “to walk a path,” like “tread”.
But that wasn’t the original literal meaning of “trade”, either, because when merchants from the Hanseatic Federation of Free Cities introduced “trade” into English, probably in the 14th century CE, it referred to the course sailed by a ship. Using it to describe the path a person walked through a forest on was a metaphorical extension, likening the person to a ship. And that’s why the trade winds are called “trade winds”.
(The Proto-Germanic root tred- from which “tread” and “trade” comes, however, already meant “walk,” as “tread” does today.)
So the process by which words acquiring meanings is, many times, an evolution from poetic fancy to well-known metaphor to tired cliché to accepted meaning. “Trade” has gone through at least four literal meanings in this chain since its introduction into English: “sailing course”, “pathway” or “walk”, “occupation”, and finally “commerce”.
So what’s the literal meaning of “tradeoff”? It didn’t exist as a word until 1959, but the phrasal verb “trade off” occurs rarely in the 19th century, with the meaning “trade away in commerce”:
If we turn to Ireland, also the land of free trade, we see an almost total inability to trade off labor in exchange for either food or clothing. Canada has free trade, yet she is unable to trade off labor for food, and Canadians are forced to get employment within the Union. Next, we see the farmer of Canada seeking to send his food to be exchanged in the markets of the Union for that labor which could not be employed at home.
The American Whig Review, August 1850, “What Constitutes Real Freedom of Trade ?”, Vol. VI, No. XXXII, p.130 (144th page of 696 in the DjVu file, 18th page of No. XXXII)
The owner of the palm-nuts must go to the caravan trader and trade off the palm-nuts for beads, brass rods, or powder.
(Apparently an 1886 United States Consular Report, probably about the Independent State of the Congo, but I’m not succeeding in finding it.)
These are the only two uses of the phrasal verb “trade off” that I’ve been able to find from the 19th century, although there are many purely coincidental occurrences of that 2-gram, in constructions like “the slave trade off the coast of Cuba”.
However, it doesn’t seem that the noun “tradeoff” ever referred to engaging in commerce. The earliest uses I've found are from the mid-1960s, after 1963, and they all seem to use “tradeoff” or “trade-off” in the sense of a design tradeoff.