Tariffs and trade – learning from history
Tariffs and trade – learning from history
Thursday 15 May 2025As the effect of tariffs on global economies remains uncertain, we highlight the work of CAGE economists who have analysed the impact of tariffs - and show that there is a lot to be learned from political and economic history.
An article in the Financial Times, Donald Trump and the long history of 'sticky' US tariffs,Link opens in a new window draws on the expertise of CAGE Associates Kevin O’Rourke, Alexander Klein and Kris Michener who have analysed the long run progression and trends in US tariffs.
"Economists say trade wars are always costly, but that tariffs will be far more disruptive now, in an interconnected global economy where trade accounts for a much larger share of output."
Recent research which looks at the Gilded Age period in US history finds that rather than boosting productivity, tariffs on imports and exports generally reduced productivity in manufacturing and weakened economic competition.
The author Alex Klein will be discussing the rise and fall of the US Manufacturing Belt over the past two centuries as part of the Institute of Economic Affairs Food for Thought series.
Watch CAGE Impact Director Dennis Novy take part in a webinar hosted by Columbia University’s Institute of Global Politics. Along with a panel of academic experts he discussed the geopolitical effects of the latest round of tariffs on an increasingly fragmented global economy.
Listen to CAGE Theme Lead Thiemo Fetzer discuss the lessons to be learnt from Trump’s first term trade war in a podcast hosted by US think tank the Niskanen Center. He has also featured in Newsweek discussing the US – China trade dispute and provided expert comment for an article on NBC News on the potential of the US worldwide tariffs to reshape the global economy.
Based on his work Tariffs and Politics: Evidence from Trump’s Trade Wars with Carlo Schwarz and published in the Economic Journal, Thiemo explains the political motivation behind targeted tariff retaliation in a VoxEU column.
The impact of tariffs on consumers and the major consumer brands was commented on by Thiemo in Newsweek and CAGE Impact Advisor Mike Waterson in the Financial Times.
As the debate continues, the risk of a return to the 1930s when Congress passed the Smoot-Hawley Tariff Act has surfaced. There are lessons to be learned, as a study by CAGE Associates Kris Mitchener and Kevin O'Rourke demonstrates. Their research into the US Smoot Hawley legislation and the widespread retaliation it encouraged, highlights the dangers of moving towards a more protectionist trade policy.