From Tariffs to Turmoil: How Protectionism Signals the Winter of Global Trade

Smoot-Hawley in 1930. Trump’s tariffs in 2025. Two eras, one pattern. The hidden economic cycle shaping the fate of globalisation.

On April 2, 2025, President Donald Trump took the stage in Ohio for what he dubbed "Liberation Day." It was a spectacle brimming with red caps, flags, and fiery rhetoric. But beneath the bravado lay a dramatic policy shift with seismic implications: a universal 10% tariff on all U.S. imports, with targeted tariffs reaching as high as 54% for Chinese goods. The audience roared. Wall Street trembled.

The official justification mirrored decades of nationalist trade rhetoric—to protect American workers, reverse trade deficits, and restore domestic manufacturing. But seasoned economists and international observers recognised the pattern immediately. This wasn’t new. It was an echo. And for those who study history, it carried the scent of 1930—the year the United States passed the Smoot-Hawley Tariff Act, a move widely blamed for deepening the Great Depression.

That act, pushed through by Senator Reed Smoot and Representative Willis Hawley, raised U.S. tariffs to historically unprecedented levels. What began as an effort to protect American farmers and industry from the aftershocks of the 1929 Wall Street crash quickly spiralled into a global trade war. Canada retaliated within weeks. European powers followed, and by 1932, world trade had shrunk by more than 60%. The economic crisis metastasised, becoming a fully global depression. At the time, more than 1,000 American economists signed a petition begging President Hoover to veto the bill. He signed it anyway.

But to reduce both the 1930 and 2025 tariffs to mere policy missteps is to miss the deeper picture. These were not sudden overreactions or ideological vanity projects. They were the symptoms of larger structural crises. Trump is not merely a symptom or a cause—he is a catalyst. In both cases, the world was entering a period of profound economic transition—where the old order no longer functioned, and the new one had yet to form. Tariffs were the visible consequence of deeper economic ruptures beneath the surface.

The 1920s had been a decade of reckless speculation and extreme inequality, buoyed by loose monetary policy and rapid industrialisation. American productivity soared, but wages stagnated. The prosperity was a mirage, propped up by credit, stock market gambling, and a widening gap between capital and labour. When the crash came in 1929, it wasn’t just a financial event. It was the detonation of a decade’s worth of systemic contradictions. Smoot-Hawley was not the cause of the Great Depression; it was the expression of a collapsing global trade consensus. A panic response that entrenched national economies just as they most needed international cooperation.

The 2025 tariffs emerged under strikingly similar conditions. The decades preceding them—particularly from the late 1990s onward—were defined by globalisation, offshoring, and hyper-financialisation. Real wages for American workers stagnated even as corporate profits reached record highs. The 2008 financial crash shattered public faith in elite economic management, and although recovery was proclaimed by metrics, the lived experience told a different story. Then came COVID-19, exposing fragile supply chains, widening inequality, and triggering a geopolitical rebalancing.

In this context, Trump’s tariffs were not just a political stunt. They were the policy expression of a fraying global economic order. They tapped into a real and growing sentiment among the working and middle classes that globalisation had failed them. But rather than addressing root causes—corporate consolidation, labour disempowerment, technological displacement—tariffs offered a scapegoat: foreign competition.

The international response followed an all-too-familiar script. China denounced the measures and vowed retaliation. The European Union called them a direct threat to the global trading system. Japan expressed regret and appealed for exemption. Even allies like Australia and Canada were rattled. In the UK, the impact has begun to ripple through critical industries: automotive supply chains, pharmaceuticals, and food imports have all reported cost increases and supply disruptions. The British Chambers of Commerce warned that these tariffs, although not directed at the UK, would have “second-hand consequences” as global trade routes reconfigure and protectionist sentiments spread.

In 1930, Britain responded to Smoot-Hawley by further strengthening its imperial trade bloc, reinforcing ties within the Commonwealth. Today, the UK, unmoored from the EU but not yet fully sovereign in global trade, finds itself again attempting to recalibrate its position amid shifting trade winds. Countries across Europe, Asia, and Latin America are all reviewing contingency plans. Some are shifting trade policy toward regionalism. Others are considering retaliatory measures. Economists warned of inflation, disrupted supply chains, and retaliatory spirals. Fitch Ratings declared the tariffs a "game changer," signalling that previous growth forecasts could no longer be trusted. The S&P 500 nosedived. Grocery bills began to climb. And yet, support among Trump's base remained firm.

To understand why, one must look beyond economics and into the realm of psychology and political legitimacy. Protectionism appeals most powerfully when the old promises of the economic order have been broken. In 1930, the American Dream was reduced to soup lines and shuttered factories. In 2025, it was repackaged in the form of tent cities, wage stagnation, and the erosion of national identity in the face of global homogenisation. A fundamental social shift is underway—one not unlike the post-Depression era's rise of organised labour, socialist movements, and new political ideologies. The social fabric is fraying, with younger generations disillusioned with capitalism and older ones nostalgic for a perceived past stability. The parallels are not just economic—they are cultural, moral, and generational.

The previous cycle’s winter brought not only economic depression but world war. It was only through the cataclysm of total war that new institutions were built: Bretton Woods, the UN, the IMF. The question today is whether we are once again in the prelude to rupture. Are today’s frictions—the fragmentation of global supply chains, the rise of nationalism, the retreat from multilateralism—simply a modern rerun of the systemic breakdown that preceded the great realignments of the 20th century?

And if so, are we capable of rewriting the script?

Both moments occurred at the onset of what long-wave theorists describe as economic "winters" in the Kondratiev cycle—periods of stagnation, upheaval, and systemic reorganisation that follow decades of expansion and speculation. While the Smoot-Hawley tariffs emerged as the world exited the roaring '20s into depression, Trump's 2025 tariffs arrive as we exit the tech-driven booms of the 1990s and 2000s, through the crashes of 2008 and the fragmentation of the post-COVID landscape. These are not random historical coincidences. They are recurring features of a cyclical economic rhythm that few politicians acknowledge, and fewer still understand.

What both eras reveal is the danger of mistaking symptom for cure. Protectionism, when deployed at the wrong time, does not protect. It isolates. It accelerates disintegration. It hardens the arteries of global trade just when circulation is needed most. And yet, it is politically irresistible during times of economic winter. Tariffs feel like action. They sound like strength. They offer the illusion of control in a world spinning out of it.

And so, history does not repeat. But it does rhyme. The Smoot-Hawley Act was not the last gasp of a dying economic system. It was its funeral pyre. Whether Trump’s tariffs will have the same effect remains to be seen, but the signals are clear: the post-war neoliberal consensus is breaking down, and something else is coming. What that is, and whether it will be born through cooperation or collapse, will depend on whether we learn from the last time the walls went up.

In the end, tariffs are just the weather vane. The real storm is already here.

The data underpinning both periods further underscores the cyclical nature of these transformations. In 1929, U.S. exports made up nearly 7% of GDP; within three years, that figure was halved. The Dow Jones Industrial Average, which had peaked at 381 in 1929, plunged to a low of 41 by 1932—a staggering 89% loss. Meanwhile, unemployment surged past 25% by 1933. These figures weren’t just numbers; they marked the collapse of faith in global integration and unregulated capitalism.

Fast forward to 2025, and we see unsettling symmetry. Global trade as a percentage of GDP peaked around 60% in 2008 and has been gradually declining. The world’s reliance on just-in-time supply chains, optimised for cost but not resilience, came under enormous strain during the COVID-19 pandemic. According to the World Trade Organization, global merchandise trade volume fell 5.3% in 2023, and early 2025 indicators suggest another contraction is underway. Simultaneously, wealth concentration has reached record levels. As of this year, the top 10% of Americans hold 70% of all household wealth, while the bottom 50% hold just 2%. Real median wages have been stagnant for over two decades.

In both eras, inequality became the powder keg, and tariffs the spark.

Long-wave theorists argue that these periods mark the terminal phase of a Kondratiev cycle—a "winter" where existing structures must give way to new ones. If the 1930s winter culminated in Roosevelt's New Deal and the post-WWII Bretton Woods consensus, what might emerge from today’s crisis? The speculative indicators are there: digital currencies, decentralised economies, regional trading blocs, and the waning dominance of the U.S. dollar. In other words, we may be witnessing not just a trade war, but the early convulsions of a profound economic realignment.

Importantly, Smoot-Hawley was not undone in a single legislative act. It took decades of policy reversals, trade agreements, and institutional invention to dismantle the framework it helped entrench. The Reciprocal Trade Agreements Act of 1934 began the long undoing. The General Agreement on Tariffs and Trade (GATT) in 1947, and later the World Trade Organisation in 1995, completed the pivot. Today’s tariffs may similarly persist—not as anomalies, but as opening salvos in a protracted reordering that will take decades to settle.

If this is the winter, then the next cycle—spring—will demand not slogans, but systems. The question is whether policymakers are willing to look beyond the immediacy of populism and protectionism to design a new consensus capable of rebuilding economic legitimacy. If not, we risk a repeat of the 1930s not just in policy, but in peril.

As history has shown, the end of a cycle doesn’t have to mean collapse. But it does require vision. And vision, like trade, is in dangerously short supply.