U.S. Trade Wars: Tariffs, Trump, and the Workers Who’ll Pay the Price

If you don’t feel like reading the whole thing, here’s the short version:

• What did tariffs do to U.S. industry and inflation in history?
  Tariffs sometimes gave domestic factories a boost by knocking out foreign competition. But they also jacked up prices for everything from shoes to bread, and when they overdid it, inflation spiked. In the 19th century, they helped industry grow; during the Great Depression, they sank the whole ship.
• Can you win a trade warWar (General Definition) War is a state of armed conflict be... More?
  Not really. You can flex your muscles and shout “America first” for a bit, but then come the retaliations, prices soar, and in the end, everyone’s crying – including the ones who started it.

Now, let’s dive in a bit deeper.

The History of U.S. Trade Wars Through Tariffs

Trade wars and tariffs have been part of the United States’ story since day one. America and tariffs? It’s a love story older than the first hamburger.
In the early years after independence, tariffs were the federal government’s cash cow. The first big tariff law, the Tariff Act of 1789, was meant to shield the young American economy from British competition. This protectionism fueled industrial growth, especially in the northern states, but it ticked off the agrarian South, which relied on imports.

By the 19th century, tariffs became a political football. Take the Tariff of Abominations in 1828 – it hiked import taxes by up to 50%, infuriating southern states and sparking the so-called Nullification Crisis. After the Civil WarWar (General Definition) War is a state of armed conflict be... More (1861–1865), high tariffs fueled the U.S. industrial revolution, protecting steel and textile industries and driving rapid economic growth. Inflation crept up, though, as imports got pricier.
The poster child of trade wars is the Smoot-Hawley Tariff Act, also known as the United States Tariff Act of 1930. This gem raised tariffs on about 900 import items by an average of 40% to 60%, affecting over 20,000 types of goods.

The goal? Protect American businesses and farmers reeling from falling prices and demand after the 1929 stock market crash. Its architects, Senator Reed Smoot and Representative Willis Hawley, figured higher tariffs would block cheap foreign goods and boost homegrown production. Instead, it was a disaster. Other countries – Canada, France, Britain – hit back fast with their own retaliatory tariffs on U.S. goods, slashing global trade by two-thirds in just a few years. U.S. exports, for instance, plummeted from $5.2 billion in 1929 to $1.7 billion in 1933. This trade collapse piled massive stress onto an already fragile economy during the Great Depression, dragging out the crisis and pushing unemployment to 25% by 1933. Historians and economists agree Smoot-Hawley didn’t cause the Depression single-handedly, but it sure made it worse – both at home and worldwide. The lesson stuck: after World WarWar (General Definition) War is a state of armed conflict be... More II, the U.S. flipped to pushing free trade through deals like GATT (later WTO), sparking a postwar economic boom.

Fast forward to modern times, and tariffs roared back under Trump’s first term (2017–2021). In 2018, he slapped 25% tariffs on steel and 10% on aluminum, later expanding them to Canada, Mexico, and the EU, plus 25% on Chinese goods. The aim was to revive U.S. industry and cut the trade deficit. Results were mixed: some steelmakers cashed in, but prices rose, hurting buyers, and China and the EU fired back with their own tariffs. Inflation ticked up slightly, but global supply chains took a beating.

Trump’s 2025 Announcement in Context

On April 2, 2025, Donald Trump(June 14, 1946 – )
Donald Trump is an American business... More, freshly re-elected president, announced a 25% tariff on all cars not made in the U.S., effective immediately. Goods from the EU will face 20%, China gets hit with 34%, and Cambodia tops the list at 49%. A 10% rate applies to stuff from the UK, Singapore, Brazil, Chile, Australia, Turkey, and Colombia. Want to dodge the tariffs? Trump says countries should ditch their own tariffs, stop currency manipulation, and clear other trade barriers with the U.S.
This move builds on his earlier playbook and promise to juice up domestic manufacturing. In his speech, he boasted that tariffs would force foreign firms to pay for access to the U.S. market and rake in $100 billion for the budget. He’s also threatening to slap more tariffs on goods, including from the EU, stirring fears of a fresh trade warWar (General Definition) War is a state of armed conflict be... More.
Historically, this reeks of the protectionism of the 19th century or Smoot-Hawley. But today’s economy is globalized – the U.S. is tangled up in supply chains with Mexico, Canada, and Europe. The auto industry Trump’s targeting, for example, relies on parts from all over. Tariffs might give U.S. carmakers a short-term lift, but pricier parts and retaliation (the EU’s already planning $26 billion in tariffs on U.S. goods) will likely jack up consumer prices and disrupt exports.
Economists warn this could replay 1930. Inflation could climb as imports get costlier, and global growth might stall. Trump’s belief that “trade wars are good and easy to win” (as he said in 2018) flies in the face of history – winners are rare. For the Czech Republic, tied to Germany’s industrial machine, this means indirect hits: a drop in exports to the U.S. via German firms could shave a few tenths off GDP.

Who’ll Pay the Price? The Working Class in the Crosshairs

The irony of Trump’s plan? The very working-class folks who vote for him and whom he promises prosperity might get hammered hardest. Car tariffs will drive up prices – the average new car in the U.S. (around $48,000 in 2024) could jump by $5,000–10,000, analysts say. For workers buying cheaper models and relying on cars to get to their jobs, that’s a bigger hole in the wallet. Plus, pricier imported parts could lead to layoffs at U.S. factories dependent on them – think Michigan or Ohio, Trump’s voter heartland.
History’s seen this before: after Smoot-Hawley, basic commodity prices shot up, hitting the lower and middle classes hardest. Today, with inflation already squeezing households (3.2% in March 2025, per the Fed), higher costs for everyday stuff – cars, appliances – could ironically weaken the very people this policy’s meant to help. Tariffs might shield jobs in one sector but threaten the broader population’s living standards, especially workers’.

Wrap-Up

Tariffs in America can prop up industry but also wreak havoc. Trump’s 2025 round is a gamble with shaky odds – in a connected world, it smells like trouble. Politically, it might sound great; economically, it’s more like Russian roulette. And the biggest losers could be the workers who think Trump’s their savior. History repeats itself – and it rarely ends with a Hollywood happy ending.