The Perils of Tariff Analogies

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July 13, 2025

President Donald Trump’s tariff hikes have drawn comparisons to historical U.S. trade policies—Trump and his supporters argue that protectionism propelled growth during the McKinley era, whereas his critics point to the damaging effects of the Smoot-Hawley tariffs that were passed during the Great Depression. This week, we’re sharing essays by the scholars Aroop Mukharji and Michael Pettis on these two periods of American history and the limits of what they can tell us about tariff policy today.
Trump sees the high tariffs promoted by his predecessor William McKinley as “an elegantly simple solution to the United States’ many, varied challenges,” wrote Mukharji. But the protectionism of the 1890s “does not suit today’s world.” During the Gilded Age, “tariffs were a normal part of politics”; now, they are an aberration in the “globally integrated economy.” And “whereas McKinley used tariffs primarily to accomplish a domestic goal—to expand U.S. industry,” Trump aims “to change the behavior of other countries.” In essence, Mukharji argued, “Trump has McKinley’s model backward.”
Drawing lessons from U.S. trade policy during the Great Depression is similarly fraught, wrote Pettis. The failure of the 1930 Smoot-Hawley tariffs “tells analysts very little about the effect that tariffs would have on the United States today” because “now, unlike then, the United States is not producing far more than it can consume.” If anyone should learn from this era, it is policymakers in China, a country “whose excess production more closely resembles that of the United States in the 1920s than does the United States of now,” Pettis concludes.

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