‘Glory Days of the 1800s’: Lessons for Your Money in Trump’s Economy
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T. Woods
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Angela Corry
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President Donald Trump began the month of April by declaring an all-new imposition of tariffs upon 180 countries in order to quell what he sees as unfair trade imbalances. The impact of the tariffs upon the world economy was so drastic that several Republicans pushed back on the president, pointing to America’s economic crises of the past as lessons for the country’s future.
Rep. Don Bacon (R-Neb.) went so far as to declare that the Republican instinct to support tariffs in the past led to the “worst depression we’ve ever had,” per Newsweek.
Speaking to Margaret Brennan, the host of Face the Nation on CBS, on a recent episode of the long-running news program, Bacon traced Republican support of tariffs in the 1800s “and up through about 1930 when we passed that Smoot-Hawley Act” as a worsening factor in the Great Depression that crippled America from 1929 to 1939.
The Smooth-Hawley Tariff Act, signed into law in 1930 by President Herbert Hoover, was enacted to protect American manufacturers and farmers in the early days of the Great Depression. Smoot-Hawley greatly increased tariffs on imported goods coming to the United States, all as a means to protect American business interests from foreign competition. Unfortunately, this backfired — America’s international trade partners retaliated with tariffs of their own, which led to a steep falloff of global trade and the Great Depression only worsened.
Bacon argued that his party’s current support of Trump’s tariffs could lead to something equally disastrous since the U.S. is facing retaliation similar to the historic events against the protectionist actions.
Brennan pushed Bacon further, asking if now-worried Republicans like Bacon didn’t take Trump seriously when he promised to take America back to the “glory days of the 1800s.”
Here’s the impact bringing back those Smoot-Hawley “glory days” could have on your finances — and the world’s.
High Unemployment
In 1930, when the Smooth-Hawley Tariff Act was signed into law, the unemployment rate in America was at 8%. After Smoot-Hawley, unemployment literally doubled in 1931 at 16%, then leapt to 25% in 1932. Amidst the already-falling job numbers of the Great Depression, the Hawley-Smoot tariffs and ensuing trade war decimated jobs throughout the country — the farming industry and import/export businesses were devastated.
A very similar set of circumstances could occur in 2025 and 2026 if America enters into a bitter trade war with its global parters, as Trump’s tariffs are met with retaliatory tariffs from countries like China, Mexico, Japan and Canada. This, coupled with the already staggering number of layoffs instituted by the Department of Government Efficiency (DOGE), could severely damage modern American employment rates.
Bank Failures
While Smoot-Hawley wasn’t a direct force behind the failures of banks in the 1930, it did escalate the American economy’s downward spiral by cratering international trade, which in turn led to a decrease in American exports (especially in the farming industry). This collapse of the farming industry drove rural banks into crisis, which then led to the serial collapse of much larger banks over time.
While the interrelationships between American industries (such as farming) and smaller banks with much larger banking institutions is far more complex and protected in 2025 than was the case in 1930, severe economic downturns can still have a negative impact upon banks. In the 2008 financial crisis, interbank lending was halted, credit fell off and banks suffered tremendous revenue losses. Additionally, the mortage securities crisis of the time drove many banking institutions to the brink of bankruptcy.
Stock Market Crash
While the stock market had already crashed by the time Smoot-Hawley came into effect, Trump’s tarrifs upon so many countries — regardless of his intent — sent American and international markets spiraling, with the U.S. stock market having its steepest drop since the summer of 2020, when the world was in the grip of the COVID-19 crisis.
Recession
While America is not yet at the precipice of a Depression, Jamie Dimon, CEO of JPMorgan Chase and Trump supporter, went so far as to declare that an American recession is “likely” in response to Trump’s tariff plan.
As a response to the insecurities of his party, Trump agreed to “pause” some of the tariffs for at least 90 days.
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