Walking backwards on trade: Have we learned nothing?

Editor's note: Zhang Siyuan is a Beijing-based commentator on international affairs, writing regularly for Xinhua News, Global Times, China Daily etc. The article reflects the author's opinions and not necessarily the views of CGTN.

Walking down a New York City street in 1931, you'd see hollow-cheeked men queuing in breadlines, department stores drowned in unsold inventory and street-side businesses with "For Rent" signs. Just a year earlier, Washington had championed the Smoot-Hawley Tariff Act in the belief that walling off America from foreign competition would fortify its economy.

But quite to the contrary, it suffocated the U.S. economy along with global trade – U.S. imports and exports collapsed by around 50 percent, GDP contracted by nearly 15 percent and unemployment skyrocketed to 25 percent around that time. Retaliatory tariffs cascaded worldwide, deepening the Great Depression and nurturing the nationalist fervor that would later engulf the planet.

Fast forward to nearly a century later, and Washington is reenacting this failed script. The U.S. government's latest tariffs – touted as a strategy to "outcompete the world"– risk igniting the same destructive cycle.

The myth of "leveling the playing field"

Washington claims that these tariffs will protect American workers by correcting an "unfair" global system. Yet this narrative ignores decades of economic asymmetry designed by the West. Advanced economies, including the U.S., have long monopolized high-value industries like aerospace and semiconductors while outsourcing labor-intensive, low-margin sectors – textiles, electronics assembly and more – to developing nations. This lopsided division of labor fueled America's consumerist boom: cheap imports from China, Mexico and Vietnam kept inflation low and living standards high. The oft-cited irony – "China must sell one million shirts to buy one Boeing jet" – is less a critique of China than a testament to a system rigged in America's favor.

Now, as the downsides of this model emerge – stagnant wages, industrial hollowing-out – the U.S. faces a reckoning. Solutions like workforce retraining, education reform and modernizing infrastructure are necessary. But instead, policymakers have again reached for the tariff hammer, a tool as politically expedient as it is economically ruinous.

Tariffs: A recipe for self-sabotage

History offers a clear verdict: Protectionism kills jobs. Industries reliant on imported materials – from automakers to solar panel producers – will see costs surge. Squeezed between rising expenses and price-sensitive consumers, businesses will slash jobs or flee to tariff-free markets. During the first Trump administration, similar policies cost America an estimated 245,000 jobs, per the U.S.-China Business Council. The tariffs today risk repeating this folly.

Meanwhile, American households will foot the bill. By 2025, the scene in New York City may not feature breadlines, but shuttered small businesses and shoppers grimacing at grocery receipts will paint a familiar picture of economic strain.

Global collateral damage

The ripple effects of Washington's tariffs extend far beyond its borders. By disrupting supply chains and raising costs for businesses worldwide, these tariffs will create a domino effect of inefficiency and uncertainty. Almost no industry anywhere in the world reliant on cross-border trade – from European automakers to Southeast Asian electronics manufacturers to Latin American textile makers – is likely to go unscathed, as they scramble to adapt to a less predictable trading environment.

An even more profound consequence will be the erosion of trust in the rules-based international trading system. The World Trade Organization (WTO), once a cornerstone of global economic stability, has been sidelined, leaving a vacuum in dispute resolution and multilateral cooperation. The lack of trust will ferment and retaliatory measures will most likely follow. Global growth will be hindered by competing tariffs and trade barriers. Collective international efforts to address shared challenges, from conflicts to climate change, will be weakened. The world will become less prosperous and less cooperative, and everyone will pay the price.

Learning from history's rhymes

Trade reform is needed, but tariffs are a relic of the past. A 21st-century playbook demands multilateral cooperation: modernizing WTO rules, incentivizing sustainable supply chains and investing in domestic competitiveness without beggar-thy-neighbor policies.

The 1930s teach us that walls breed poverty, not prosperity. As supply chains snap and inflation bites, the U.S. must choose: repeat the past mistakes or forge a path toward inclusive globalization. The stakes extend far beyond economics – they shape whether the world collaborates or fractures in the face of existential challenges.

Mark Twain famously said that "history doesn't repeat itself, but it often rhymes." The question is whether Washington will heed its echoes.

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