In the early days of the Great Depression, Rep. Willis Hawley, a Republican from Oregon, and Utah Republican Sen. Reed Smoot thought they had landed on a way to protect American farmers and manufacturers from foreign competition: tariffs. President Herbert Hoover signed the Smoot-Hawley Tariff Act in 1930, even as many economists warned that the levies would prompt retaliatory tariffs from other countries, which is precisely what happened. The U.S. economy plunged deeper into a devastating financial crisis that it would not pull out of until World War II. Most historians look back on Smoot-Hawley as a mistake that made a bad economic climate much worse. But tariffs have a new champion in President Donald Trump. Like Trump, Hoover was elected largely because of his business acumen. An international mining engineer, financier and humanitarian, he took office in 1929 like an energetic CEO, eager to promote public-private partnerships and use the levers of government to promote economic growth. “Anyone not only can be rich, but ought to be rich,” he declared in his inaugural address before convening a special session of Congress to better protect U.S. farmers with “limited changes of the tariff.” Instead, the 31st president got the Great Depression. Trump, now championing his own sweeping tariffs that have sent global markets into a tailspin, argues that the U.S. was founded on steep import taxes on goods from abroad. But the country began abandoning them when it created a federal income tax in 1913, the president says. Then, “in 1929, it all came to a very abrupt end with the Great Depression. And it would have never happened if they had stayed with the tariff policy,” Trump said in announcing his tariff plan last week. Referring to Smoot-Hawley, he added, “They tried to bring back tariffs to save our country, but it was gone. It was gone. It was too late. Nothing could have been done — took years and years to get out of that depression.” America’s history of high tariffs actually continued well after 1913, however, and Trump’s take on what sparked the Great Depression — and Hoover-era Washington’s response to it — don’t reflect what actually happened. Gary Richardson, an economics professor at the University of California, Irvine, said the U.S. long maintaining high tariffs “helped to shift industry here. But we’ve gotten rid of them because, as the country at the cutting edge of technology, we didn’t think they were useful.” “When we were at our most powerful, right after World War II, we forced a low tariff regime on most of the world because we thought it was to our benefit,” said Richardson, also a former Federal Reserve System historian. “Now, we’re going back to something else.” Tariffs date to 1789 George Washington signed the Tariff Act of 1789, the first major legislation approved by Congress, which imposed a 5% tax on many goods imported into the U.S. With no federal income tax, the policy was about finding sources of revenue for the government while also protecting American producers from foreign competition. After the War of 1812 disrupted U.S. trade with Great Britain, the U.S. approved more tariffs in 1817 meant to shield domestic manufacturing from potentially cheaper imports, especially textiles. High tariffs remained for decades, particularly as the government looked to increase its revenue and pay down debt incurred during the Civil […]