Trump Delivers Historically Illiterate Lecture on Tariffs

Donald Trump has grown increasingly fixated on tariffs, which he seems to think, contrary to the consensus among economists, are borne by foreigners. Trump understands at some level that economists and most business owners disagree with him, but rather than paper over their dispute, he insists — his insistence being an indicator of the depths of his conviction — upon trying to win them over to his side.

In a speech to the Detroit Economic Club, Trump made a remarkable, error-strewn diatribe in favor of tariffs:

Trump on tariffs: Our greatest wealth probably proportionately was in the 1880s.. we had so much much money all from tariffs… then you had the depression. A lot of people said tariffs caused it. They didn't, tariffs came in 1932 after the depression. pic.twitter.com/st3hYhvmSe

— Acyn (@Acyn) October 10, 2024

In under a minute, Trump claimed, first, that when it relied on tariffs for revenue, the United States (by which he means the government) had more wealth (by which he means revenue) than at any other time in its history. “We had so much money,” he said, “all from tariffs; there was no income tax.”

The truth is the opposite. Before the creation of the income tax, the United States did rely on tariffs as a major funding source. But the government collected far less revenue:

Trump proceeded to tell his audience that, contrary to popular belief that the U.S. imposed a tariff that worsened the Depression, in fact tariffs only came into use in 1932.

That is also false. The Smoot-Hawley tariff was implemented in 1930. One of its major effects was to set off retaliatory tariffs by trading partners, thus hurting American manufacturers as well as consumers. The economic contraction was underway when the tariff was implemented, but economic conditions grew much worse after it was put in place.

Furthermore, Franklin D. Roosevelt liberalized trade after taking office in 1933. Tariff rates plunged as the economy recovered from the Depression. To be sure, tariffs are not even close to the main reason the economy recovered, but Trump’s belief that they were hiked only beginning in 1932 is the reverse of what occurred.

Trump, in some ways, is obsessed with an economic agenda of which his understanding is so rudimentary he gets the most important historical facts about it backward.

Many Republican elites believe that Trump either doesn’t mean it when he presents tariffs as an economic cure-all or that they can talk him out of it after the election. But Trump would have unilateral power to impose tariffs through executive action; he does not need Congress. And the idea that a lifelong megalomaniac who lacks a basic understanding of government will somehow become amenable to reason is, at best, optimistic.

Conservatives don’t worry about Trump’s undisguised authoritarian ambitions because they think he’s going to use his powers for policies they believe in. In part, that is true. But Trump is also determined to implement a tariff agenda most conservative elites understand would have disastrous ramifications. Maybe the authoritarianism, criminality, and racism aren’t worth it?