Donald Trump has hit the 30-day pause button on imposing 25% tariffs on Canada and Mexico, but is proceeding with slapping 10% tariffs on Chinese imports, and tariffs on the EU are still on his agenda.
Trump has declared that “tariff” is “the most beautiful word in the dictionary”. Yet as the president weighs up the sweeping consequences of his tariff fixation, he may want to throw out the dictionary and pick up a history book.
The magnitude and scale of the proposed tariffs hark back to the US Smoot-Hawley Tariff Act enacted in 1930.
For example, Nobel Laureate economist Paul Krugman told Bloomberg that “we’re really talking about tariffs on a scale that we … have not seen,” adding that “we’re talking about a reversal of really 90 years of US policy”.
The Smoot-Hawley tariffs were initially intended to provide support to the deeply indebted US agricultural sector at the end of the 1920s, and protect them from foreign competition – all familiar themes to the anti-free-trade rhetoric peddled by Trumpists today.
The advent of the Great Depression had generated widespread, albeit not universal, demands for protection from imports, and Smoot-Hawley increased already significant tariffs on overseas goods. Members of Congress were eager to provide protection, trading votes in exchange for support for their constituents’ industries.
Although at the time more than 1,000 economists implored President Herbert Hoover to veto Smoot-Hawley, the bill was signed into law. The resulting tariff act led to taxes averaging nearly 40% on 20,000 or so different types of imported goods.
The culmination led to a dramatic decline in US trade with other countries, particularly among those that retaliated, and is widely acknowledge as severely worsening the Great Depression. According to one estimate, the sum of US imports plummeted by nearly half.
What’s more, the impacts were felt globally. Protectionist policies are believed to have accounted for about half of the 25% decline in world trade, and indirectly helped create economic factors that led to the second world war.
The blowback against Capitol Hill was immense as well: the optics of vote trading over the tariff act resulted in Congress delegating control over trade policy to the president just four years later because the behaviour was regarded as so reckless.
All of this came against the backdrop of diplomatic American isolationism in the 1930s, which were not unlike many of Trump’s current efforts to retreat from – or even attack – multilateral institutions.
Despite President Woodrow Wilson winning the Nobel Peace Prize in 1919 for his work initiating the League of Nations (a forerunner of the United Nations), for example, the US never became a member. The term “America first” was also used widely in this period to refer to a focus on domestic policy and high tariffs.
Fast forward to present day
Trump has said that his tariffs will cause “some pain” but are “worth the price that must be paid.” Based on recent estimates from the non-partisan Peterson Institute for International Economics, Trump’s tariffs could drive up costs for the average US household more than US$1,200 (£963) per year.
Whether US voters will still stand behind Trump when actual prices begin to rise is still to be determined.
However, many Republicans on Capitol Hill have rushed to Trump’s defence. Congresswoman Claudia Tenney of New York told Fox News that she’s glad the US is “projecting strength for once on the world stage”. Senator Eric Schmitt of Missouri insisted that tariffs were “not a surprise,” emphasising that Trump had relentlessly campaigned on “improving our standing in the world.”
Perhaps the sharpest Republican rebuke came from Sen. Mitch McConnell of Kentucky, who labelled the tariffs simply a “bad idea”.
Public opinion data show that tariffs are hotly contested, with partisanship shaping both general views toward tariffs and views on specific national targets.
According to a January 2025 Harvard CAPS/Harris poll, 52% of Americans overall approve of placing new tariffs on China, with 74% of Republicans in favour, but just 34% of Democrats.
Support is more modest for imposing tariffs on America’s neighbours. Only 40% of voters think tariffs on Canada and Mexico are a good idea, including 59% of Republicans and 24% of Democrats.
Tariffs rank low on a list of national priorities. A mere 3% of Americans think tariffs on Canada and Mexico should be a top priority for Trump in his first 100 days, while just 11% rank tariffs on China as a top priority.
Prospect of a broader trade war
What seems clear is that Trump’s proposed tariffs against Canada, Mexico, and China could be just the opening salvos in a broader tit-for-tat that may extend to Europe, and beyond.
At home, the political challenge for Trump is to keep intact what increasingly looks like a fragile coalition – balancing the interests of hardline Maga supporters who reject free trade and tech titans who see tariffs as disrupting vital supply chains, especially to Asia.
After Trump’s election, former adviser and populist nationalist Steve Bannon warned that America would no longer be “abused” by “unbalanced trade deals.” “Yes, tariffs are coming,” he said. “You will have to pay to have access to the US market. It is no longer free, the free market is over.”
Meanwhile, Silicon Valley has been mostly silent on the tariffs. While tech moguls are doubtlessly trying to curry favour for tariff exemptions or the reduction of tariffs altogether, it’s possible that they have been assured that the tariffs are about leverage and will be gone soon enough.
Regardless, Trump is showing that tariffs are a crucial part of his “America first” foreign policy, a kind of belligerent unilateralism that treats allies and adversaries alike as pieces to be moved around a chessboard.
Under Trump, the “art of the deal” means throwing America’s weight around as the world’s economic superpower, and waiting for the leaders of other nations to fold. Whether American voters will endure the economic costs necessary for his plans could determine his resolve.
Trump may think that tariff is a beautiful word now. But if even a glimmer of the 1930s repeats itself, its economic shadow could soon look grim.
Donald Trump has hit the 30-day pause button on imposing 25% tariffs on Canada and Mexico, but is proceeding with slapping 10% tariffs on Chinese imports, and tariffs on the EU are still on his agenda.
Trump has declared that “tariff” is “the most beautiful word in the dictionary”. Yet as the president weighs up the sweeping consequences of his tariff fixation, he may want to throw out the dictionary and pick up a history book.
The magnitude and scale of the proposed tariffs hark back to the US Smoot-Hawley Tariff Act enacted in 1930.
For example, Nobel Laureate economist Paul Krugman told Bloomberg that “we’re really talking about tariffs on a scale that we … have not seen,” adding that “we’re talking about a reversal of really 90 years of US policy”.
The Smoot-Hawley tariffs were initially intended to provide support to the deeply indebted US agricultural sector at the end of the 1920s, and protect them from foreign competition – all familiar themes to the anti-free-trade rhetoric peddled by Trumpists today.
The advent of the Great Depression had generated widespread, albeit not universal, demands for protection from imports, and Smoot-Hawley increased already significant tariffs on overseas goods. Members of Congress were eager to provide protection, trading votes in exchange for support for their constituents’ industries.
Although at the time more than 1,000 economists implored President Herbert Hoover to veto Smoot-Hawley, the bill was signed into law. The resulting tariff act led to taxes averaging nearly 40% on 20,000 or so different types of imported goods.
The culmination led to a dramatic decline in US trade with other countries, particularly among those that retaliated, and is widely acknowledge as severely worsening the Great Depression. According to one estimate, the sum of US imports plummeted by nearly half.
What’s more, the impacts were felt globally. Protectionist policies are believed to have accounted for about half of the 25% decline in world trade, and indirectly helped create economic factors that led to the second world war.
The blowback against Capitol Hill was immense as well: the optics of vote trading over the tariff act resulted in Congress delegating control over trade policy to the president just four years later because the behaviour was regarded as so reckless.
All of this came against the backdrop of diplomatic American isolationism in the 1930s, which were not unlike many of Trump’s current efforts to retreat from – or even attack – multilateral institutions.
Despite President Woodrow Wilson winning the Nobel Peace Prize in 1919 for his work initiating the League of Nations (a forerunner of the United Nations), for example, the US never became a member. The term “America first” was also used widely in this period to refer to a focus on domestic policy and high tariffs.
Fast forward to present day
Trump has said that his tariffs will cause “some pain” but are “worth the price that must be paid.” Based on recent estimates from the non-partisan Peterson Institute for International Economics, Trump’s tariffs could drive up costs for the average US household more than US$1,200 (£963) per year.
Whether US voters will still stand behind Trump when actual prices begin to rise is still to be determined.
However, many Republicans on Capitol Hill have rushed to Trump’s defence. Congresswoman Claudia Tenney of New York told Fox News that she’s glad the US is “projecting strength for once on the world stage”. Senator Eric Schmitt of Missouri insisted that tariffs were “not a surprise,” emphasising that Trump had relentlessly campaigned on “improving our standing in the world.”
Perhaps the sharpest Republican rebuke came from Sen. Mitch McConnell of Kentucky, who labelled the tariffs simply a “bad idea”.
Public opinion data show that tariffs are hotly contested, with partisanship shaping both general views toward tariffs and views on specific national targets.
According to a January 2025 Harvard CAPS/Harris poll, 52% of Americans overall approve of placing new tariffs on China, with 74% of Republicans in favour, but just 34% of Democrats.
Support is more modest for imposing tariffs on America’s neighbours. Only 40% of voters think tariffs on Canada and Mexico are a good idea, including 59% of Republicans and 24% of Democrats.
Tariffs rank low on a list of national priorities. A mere 3% of Americans think tariffs on Canada and Mexico should be a top priority for Trump in his first 100 days, while just 11% rank tariffs on China as a top priority.
Prospect of a broader trade war
What seems clear is that Trump’s proposed tariffs against Canada, Mexico, and China could be just the opening salvos in a broader tit-for-tat that may extend to Europe, and beyond.
At home, the political challenge for Trump is to keep intact what increasingly looks like a fragile coalition – balancing the interests of hardline Maga supporters who reject free trade and tech titans who see tariffs as disrupting vital supply chains, especially to Asia.
After Trump’s election, former adviser and populist nationalist Steve Bannon warned that America would no longer be “abused” by “unbalanced trade deals.” “Yes, tariffs are coming,” he said. “You will have to pay to have access to the US market. It is no longer free, the free market is over.”
Meanwhile, Silicon Valley has been mostly silent on the tariffs. While tech moguls are doubtlessly trying to curry favour for tariff exemptions or the reduction of tariffs altogether, it’s possible that they have been assured that the tariffs are about leverage and will be gone soon enough.
Regardless, Trump is showing that tariffs are a crucial part of his “America first” foreign policy, a kind of belligerent unilateralism that treats allies and adversaries alike as pieces to be moved around a chessboard.
Under Trump, the “art of the deal” means throwing America’s weight around as the world’s economic superpower, and waiting for the leaders of other nations to fold. Whether American voters will endure the economic costs necessary for his plans could determine his resolve.
Trump may think that tariff is a beautiful word now. But if even a glimmer of the 1930s repeats itself, its economic shadow could soon look grim.
