Trump’s Trade War: New Tariffs, Old Mistakes

On April 2, 2025, President Trump announced one of the most aggressive tariff packages in modern U.S. history, declaring a national economic emergency and invoking the International Emergency Economic Powers Act.

The details:

• A 10% universal tariff on all imports, effective April 5. This covers nearly everything coming into the U.S., regardless of origin, with narrow exceptions for Canada and Mexico.

• Additional “reciprocal” tariffs of 11% to 50% on about 60 countries, starting April 9.

  • China now faces a total tariff rate of 54%.

  • The EU: 20%.

  • Japan: 24%.

  • South Korea: 25%.

• A 25% tariff on foreign-assembled vehicles, starting April 5. Tariffs on auto parts roll out in May.

  
  

The stated goals: reduce the national debt, bring manufacturing home, and protect sovereignty. The actual effects so far? Market volatility, international blowback, and rising costs with no clear upside.

This isn’t the first time America has tried broad tariffs in a shaky economy.

In 1930, the Smoot-Hawley Tariff Act raised duties on 20,000+ imports to protect U.S. farmers and manufacturers. Instead, it triggered a global trade war.Over 25 countries retaliated. Global trade fell more than 60%.U.S. exports tanked. Prices jumped. The Depression deepened.

It’s a classic case of untargeted economic policy making everything worse — not just at home, but everywhere.

Sound familiar?

South Korea: Tariffs That Built an Empire

In the ‘70s and ‘80s, South Korea protected key industries like steel, semiconductors, and shipbuilding with temporary, targeted tariffs.

At the same time, they made huge bets on R&D, infrastructure, and export incentives.

The result? Companies like Samsung, Hyundai, and LG became globally competitive — and the tariffs came down.

Today, South Korea is the #2 chip exporter, a global EV and battery leader, and a serious industrial power. The incentives were narrow, time-bound, and backed by a strategy. It worked.

Brazil: Tariffs That Attracted Investment

Brazil didn’t tax everything. It used auto tariffs as leverage.

If a foreign automaker wanted to sell in Brazil, they had two options:Pay high import duties — or build a factory and source local parts.

Toyota, Volkswagen, Fiat, and GM all chose to build. Plants opened in São Paulo, Minas Gerais, and Bahia.

Brazil didn’t just protect jobs — it created them. It didn’t just resist imports — it used tariffs to negotiate domestic investment.

The U.S. Approach: All Risk, No Strategy

Trump’s current plan doesn’t look like that.

It’s a minimum 10% tax on everything, everywhere. No focus on key industries. No rewards for domestic production. No clear timeline. It hits allies and adversaries the same — and punishes U.S. firms that depend on global inputs.

This isn’t industrial policy. It’s friction for friction’s sake.

So What Now?

If you’re an American trying to build, invest, or plan — the lesson isn’t “panic.” It’s: get resilient.

• Diversify your income streams.

• Shorten your supply chains where you can.

• Watch policy as closely as you watch markets.

• Build skills and structures that travel well.

We’ve entered a policy-driven economy. The rules keep changing. Volatility is the norm.

And while government swings hammers, your edge is adaptability.