Feeling tariff whiplash? You’re not alone. On April 2, President Donald Trump announced sweeping new tariffs – a 10% levy on nearly all U.S. imports, along with targeted duties aimed at punishing countries he accuses of exploiting American markets. Just a week later, on April 9, his administration abruptly paused much of the plan for 90 days, leaving markets and allies scrambling for clarity.
The proposed tariffs were pitched as a way to revive U.S. manufacturing, reclaim jobs and counter what Trump considers unfair trade practices. But they immediately rattled the financial markets and raised alarms among economists and America’s global partners. Critics across the political spectrum revived a familiar warning: “beggar-thy-neighbor.”
History shows that such policies rarely succeed. In today’s interconnected world, they’re more likely to provoke swift, precise and painful retaliation.
The “beggar-thy-neighbor” phrase comes from economic history and refers to protectionist measures – tariffs, import restrictions or currency manipulation – designed to boost one country’s economy at the expense of its trading partners.
This approach starkly contrasts with the principles laid out by Adam Smith. In “The Wealth of Nations,” he argued that trade is not a zero-sum game. Specialization and open markets, he observed, create mutual benefit – a rising tide that lifts all boats. Trump’s tariffs disregard this logic.
History backs Smith. In the 1930s, the U.S. adopted a similar strategy to Trump’s, raising duties to protect domestic jobs. The result was a wave of global retaliation that choked international trade and worsened the Great Depression.
As an example, consider the 50% tariff the U.S. imposed on imports from Lesotho, a small landlocked African nation. The measure took effect at midnight on April 3 but was reportedly subject to the 90-day pause starting midday April 4.
The 50% tariff would have a negligible effect on the U.S. economy – after all, out of the $3.3 trillion the U.S. imported in 2024, only a tiny fraction came from Lesotho. But for Lesotho, a nation that relies heavily on garment exports and preferential U.S. market access, the consequences would be severe. Using the same tariff logic across all partners, big or small, overlooks basic economic realities: differences in scale, trade capacity and vulnerability. It epitomizes beggar-thy-neighbor thinking: offloading domestic frustrations onto weaker economies for short-term political optics.
Such thinking has consequences. During Trump’s first term, China retaliated against U.S. tariffs by slashing imports of American soybeans and pork. As a result, those exports plummeted from $14 billion in 2017 to just $3 billion in 2018, hitting politically sensitive states such as Iowa hard. The European Union responded to U.S. steel and aluminum tariffs by threatening to target bourbon from Kentucky and motorcycles from Wisconsin.
In 2002, President George W. Bush imposed tariffs of up to 30% on imported steel, prompting the European Union to threaten retaliatory tariffs targeting products such as Florida citrus and Carolina textiles made in key swing states. Facing domestic political pressure and a World Trade Organization ruling against the measure, Bush reversed course within 21 months.
A decade earlier, the Clinton administration endured a long-running trade dispute with the EU known as the “banana wars,” in which European regulators structured import rules that disadvantaged U.S.-backed Latin American banana exporters in favor of former European colonies.
During the Obama years, the U.S. increased visa fees that disproportionately impacted India’s technology services sector. India responded by delaying approvals for American drugmakers and large retail investments.
Not all forms of trade retaliation grab headlines. Many are subtle, slow and bureaucratic – but no less damaging. Customs officials can delay paperwork or may impose arbitrary inspection or labeling requirements. Approval for U.S. pharmaceuticals, tech products or chemicals can be stalled for vague procedural reasons.
The cost is real: missed delivery deadlines, lost contracts and rising operational costs. Over time, American businesses may shift operations abroad – not because of labor costs or regulation at home, but to escape the slow drip of bureaucratic punishment they experience elsewhere.
Supporters of tariffs often argue that they protect domestic industries and create jobs. In theory, they might. But in practice, recent history shows they are more likely to invite retaliation, raise prices and disrupt supply chains.
Rather than resorting to beggar-thy-neighbor tactics, the U.S. could secure its future by investing in what truly drives long-term strength: smart workforce development, breakthrough innovation and savvy partnerships with allies. This approach would tackle trade imbalances through skillful diplomacy instead of brute force while building resilience at home by equipping American workers and companies to thrive.
Bedassa Tadesse is a professor of economics at the University of Minnesota Duluth. Distributed by The Conversation and The Associated Press.
