Within just a few weeks, President Donald Trump’s aggressive tariff policies have undone a century’s worth of trade liberalization in the United States. Economists caution that the restoration of this trade landscape may take significantly longer.
Historical instances of protectionism indicate that once trade barriers are constructed, dismantling them can be an arduous endeavor. “What can be put in place swiftly does not necessarily get taken down quickly,” remarked Doug Irwin, a Dartmouth College professor with extensive writing on trade issues.
Irwin pointed out that the comprehensive tariff hikes implemented by the Smoot-Hawley Act of 1930, often blamed for worsening the Great Depression, were eventually revisited after a governmental shift but still required “decades to be unwound.”
Trump’s implementation of blanket 10 percent tariffs along with bilateral charges will, effectively, raise the tariff rate on all U.S. imports to its highest level since 1909.
The president has often cited the previous “gilded age” marked by growth and inequality, a time when federal income tax was nonexistent, and then-President William McKinley was advocating for average tariffs nearing 50 percent.
“We were at our richest from 1870 to 1913,” Trump stated shortly after taking office. “That was when we were a tariff nation.”
While economists agree that trade wars entail costs, they assert that tariffs now will have even greater disruptions in today’s interconnected global economy, where trade constitutes a larger portion of economic output.
The most favorable opportunity for a rapid de-escalation would arise if the Trump administration viewed the new tariffs as leverage to obtain concessions in other areas, whether related to trade or other diplomatic goals, according to Irwin.
This mirrors Richard Nixon’s strategy in 1971 when he imposed a 10 percent surcharge on all dutiable imports to compel Germany and Japan to devalue their currencies. “Once that was achieved, the tariffs were removed,” Irwin noted.
Countries still have a brief opportunity to seek relief from the so-called reciprocal rates that are set to take effect on April 9, even if the 10 percent universal rate appears to be less negotiable.
However, when strategies similar to Nixon’s fail to produce concessions, tariffs can remain in effect for decades.
A notable example is the 25 percent “chicken tax” on U.S. light truck imports, first introduced in the early 1960s in response to a European tariff on American poultry. It has never been repealed and has significantly influenced the global auto industry. This situation has arguably been disadvantageous for the U.S. as it led domestic manufacturers to focus on fuel-inefficient trucks while hesitating to expand into markets for smaller, more efficient cars.
Tariffs designed to bolster domestic industries and reshore jobs tend to be even more “sticky,” lingering long after the original political motivations have diminished.
This persistence is partly due to new lobbying groups forming around these trade barriers, as well as a governmental interest in negotiating a quid pro quo in exchange for tariff reductions, explained Gary Hufbauer, a former U.S. Treasury official and expert on trade, who remarked: “I don’t anticipate a quick response.”
Tariffs in sensitive sectors like agriculture tend to last even longer.
“European agricultural protectionism emerged in the 1870s and 1880s as a reaction to an influx of inexpensive grain from the New World, and it remains in place today,” stated Kevin O’Rourke, a professor at Sciences Po in Paris.
The difference in Coca-Cola’s recipe in the U.S. versus Mexico arises from quotas and subsidies that protect farmers in key states, rendering high fructose corn syrup more affordable than sugar.
This shield against lower-priced imports “essentially catalyzed the invention and commercialization of new products,” noted Chad Bown, chief economist at the State Department during Joe Biden’s administration.
Furthermore, tariffs tend to remain popular among voters.
Alexander Klein, an economic historian at Sussex University, observed that tariffs implemented during the U.S. Civil War for revenue purposes endured well beyond their necessity, as they resonated with voters and a business class content with being safeguarded.
“What history reveals is that voters prioritize job protection as workers over their rights as consumers,” he remarked.
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When the Smoot-Hawley tariffs were ultimately fully lifted after World War II, it was aligned with U.S. trade interests, remarked Klein.
“It served the U.S. well, which pressured Europe to establish a free trade area as their primary market was Europe — Asia and Africa were not affluent enough at that point,” he added.
However, a crucial factor that could render Trump’s new trade policies enduring is if tariffs evolve into a substantial source of federal revenue, reminiscent of their role during the 19th century.
“If the intention is to maintain permanent tariffs to fund tax reductions, that would make them significantly stickier, as eliminating them would require raising other taxes,” noted Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics.
Kris Mitchener, a Santa Clara University professor, stated that if Trump’s aim was to employ tariffs as a negotiation tactic or to enhance domestic industries, it might be futile — likely provoking retaliation from other nations and fostering a perception that U.S. policymaking is subject to change.
Nonetheless, he remarked: “If a 10 percent universal tariff is now the baseline, and the objective is revenue, reversing it seems unlikely.”
