Are Tariffs a Recipe for Recession? A Look at History — and Today’s Worries

Tariffs — the word sounds old-fashioned, like something out of a dusty economics textbook. But in reality, tariffs have shaped global economies for centuries, and they’re making headlines again as the U.S. and other countries toy with trade barriers in 2025.So why do so many economists get nervous when tariffs come back into style? History holds some big clues.

A Quick History Lesson: Tariffs and Economic Pain

Let’s rewind to one of the most famous cautionary tales: The Smoot-Hawley Tariff Act of 1930. Passed at the height of the Great Depression, this act raised tariffs on thousands of imported goods in a misguided attempt to protect American jobs.

Instead, it sparked a global trade war. Countries retaliated, world trade collapsed by more than 60%, and what could have been a painful recession turned into a full-scale economic disaster.

That wasn’t the first or last time tariffs played a role in deepening financial crises. High tariffs often trigger:

• Reduced global trade
• Higher prices for consumers
• Supply chain disruptions
• Retaliatory tariffs from other nations

All of which can slow economic growth and even tip economies into recession.

 

Why Economists Are Concerned — Right Now

Fast forward to 2025, and tariffs are back on the table. The U.S. has recently slapped new tariffs on imports from major trading partners, while giving some countries — including Russia — puzzling exemptions.

With global supply chains already strained from pandemic aftershocks, wars, and rising political tension, more tariffs could lead to:

• Higher consumer prices (which we’re all still feeling from pandemic-era inflation)
• Strained relationships with allies
• Lower export demand for American-made goods
• Potential domino effects for global growth

In short, economists worry this could set the stage for an avoidable recession — one built more on politics than economic fundamentals.

 

Bottom Line: Protectionism Isn’t Always Protection

While tariffs can sound like a quick fix for domestic jobs and industries, history shows they can easily backfire — harming consumers, sparking trade wars, and even dragging entire economies into deeper trouble.

With the world so interconnected, it’s worth asking: are we about to relearn an expensive old lesson?

 

Want to Learn More? Here Are Some Great Resources:

• “The Great Depression: A Diary” by Benjamin Roth — a firsthand look at life during one of history’s most tariff-affected economic disasters.
•  Planet Money Podcast: The Tariff Episode — a plain-English breakdown of how tariffs work and why they can backfire.
• The Peterson Institute for International Economics — piie.com — offers detailed research and policy analysis on tariffs and global trade.
•  Brookings Institution — brookings.edu — regularly publishes clear, nonpartisan insights on trade policy and its economic impacts.