Trump's love affair with tariffs will cost you
The president-elect wants to turn back the clock a century to the days when American politics revolved around protecting U.S. industries
The Cordell Hull dam sits on the Cumberland River north of Murfreesboro, Tennessee.
The Cordell Hull building in Nashville houses the offices of state legislators.
In 2020, the state museum honored Cordell Hull with an exhibition that included the Nobel Peace Prize medal he received in 1945 for helping to create the United Nations.
Yet none of these memorials quite recognizes the way in which Hull monumentally changed American history starting in the 1930s. During his tenure as the longest-serving secretary of state, Hull achieved his decades-long goal of upending America’s policy on tariffs and trade.
Despite strong opposition, Hull put in place the building blocks for a system of freer trade that still survives, even as former President Donald Trump and President Joe Biden have toyed with dismantling it.
In October, Donald Trump told the Economic Club of Chicago, “The most beautiful word in the entire dictionary of words is the word tariff…It's gonna make us rich.”Trump is vowing to create a new agency, the “External Revenue Service,” to collect the vastly increased tariffs he is threatening to levy. "We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share," Trump declared.
In his love affair with tariffs, Trump aims to transport America back to its first 150 years, when duties levied on trade funded much of the government and embroiled Congress, and often the president, in endless rounds of bargaining, lobbying and logrolling which shaped the fate of industries large and small.
Trump has mused about letting loose such a gusher of tariff revenue that Americans would no longer have to pay substantial taxes to the IRS. Of course, tariffs wind up raising prices for products, and American consumers will have to pick up the tab.
Last month, the Wall Street Journal reported that “Trump’s tariff proposal could add about $3,000 to the average cost of every car sold in the U.S., according to a Wolfe Research estimate.”
“Everyone’s got a pretty big case of anxiety here,” the Journal quoted Steven Center, head of Kia’s U.S. operations. “In two words: Please don’t. Punch me in the arm. Smack me in the head. But please don’t put a tariff on.”
JP Morgan forecasters expect Trump to impose tariffs on imports from China that would raise U.S. inflation by .4%.
If the president sets a 10% universal tariff, U.S. economic growth would take a .5% hit, according to the Tax Foundation. Other forecasts predict the impact of such tariffs on US output would be even higher.

For long periods in the 19th century, the federal government was largely funded by tariff revenue. That began to change permanently in 1913, with the passage of a bill sponsored by Rep. Cordell Hull that established an income tax.
Today taxes provide the vast bulk of the $4.44 trillion in federal revenue; tariffs account for only 2% of that sum. The White House chart below shows how tariff income fell off a cliff in the early decades of the 20th century — and has stayed at a much-diminished level, even through Trump’s first term.
The world of 2025 is very different from the early 1930s. China is now the world’s “manufacturing superpower,” and Trump may see punitive tariffs as the route to jump-starting manufacturing growth in the U.S. Or he may, as some have suggested, be waving the threat of tariffs to prompt China, Mexico, Canada and other nations to offer concessions at the negotiating table.
Why tariffs?
As Douglas A. Irwin, the John French Professor of Economics at Dartmouth College, writes in his comprehensive and insightful study, “Clashing Over Commerce: A History of US Trade Policy,” tariffs have served three purposes in America’s nearly two and a half centuries of existence.
At first, they were used to provide revenue to fund the government in the absence of broad-based taxes. Later they served as walls to protect U.S. industries from foreign competition. And finally, through the efforts of Hull and others, they set the stage for reciprocal trade agreements to promote international cooperation and economic development around the world.
“Of all the people who have left a mark on US policy,” Irwin observed, “none has had a greater or more lasting impact than Cordell Hull. Hull’s lifelong project, the reciprocal trade agreements program, fundamentally changed the direction of US trade policy over the course of the 1930s and 1940s."
President Franklin D. Roosevelt, who appointed Hull, did not totally share his convictions about trade, and many of FDR’s advisers came from the Northeast, a region that historically supported tariff barriers to protect manufacturers.
Hull was a southerner, born in a log cabin and the son of a farmer and lumber merchant. As an agricultural region dependent on the export of cotton and other farm products, the South had long opposed high tariffs.
But Hull cited loftier motives for opposing obstacles to trade: “Though realizing that many other factors were involved, I reasoned that, if we could get a freer flow of trade—freer in the sense of fewer discriminations and obstructions—so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance for lasting peace."
‘Fanatical single-mindedness’
One Roosevelt administration official who later became Secretary of State, Dean Acheson, noted Hull’s “almost fanatical single-mindedness” on the matter.
Hull “devoted himself to getting legislative authority, and then acting upon it, to negotiate ‘mutually beneficial reciprocal trade agreements to reduce tariffs’ on the basis of equal application to all nations, a thoroughly Jeffersonian policy. . . . Mr. Hull’s amazing success with this important undertaking, a reversal of a hundred years of American policy, was due both to his stubborn persistence and to his great authority in the House of Representative and the Senate.”
But there was substantial skepticism. Hull’s “insistence that economic rivalry was the cause and not the consequence of international friction was debatable, to say the least,” wrote Irwin. “Many of his contemporaries thought that he was naive and completely exaggerated the likelihood that freer trade would promote peace.”
Some offered even harsher verdicts. Sen. Hiram Johnson, an isolationist from California, said Hull had “more delusions concerning the world than a dog has fleas.”
“Many of his contemporaries thought that Hull was naive and completely exaggerated the likelihood that freer trade would promote peace’ — Douglas Irwin
The famed economist John Maynard Keynes, who represented Britain in negotiations with the US over trade, at one point exasperatedly referred to the “lunatic proposals of Mr. Hull,” Irwin noted.
FDR
Harold Ickes, an adviser to FDR, quoted the president himself as referring to Hull’s advocacy for trade deals in withering terms: “how futile it was to think that we could be doing ourselves any good, or the world any good, by making it possible to sell a few more barrels of apples here and a couple of automobiles there.”
Roosevelt was so hands-on with foreign relations and the conduct of World War II that Hull was often on the sidelines except for issues relating to trade. Hull signally failed to act on the plight of Jews fleeing the Holocaust. His wife was the daughter of a Jewish immigrant from Austria, but when the St. Louis, a ship carrying refugees from Europe, sought a home for its passengers in the U.S., Hull and Roosevelt wouldn’t provide it and the ship had to return to Europe. More than a quarter of the 937 passengers would die at the hands of the Nazis.
Despite doubts, FDR supported Hull’s legislative effort to take much of the tariff-setting power away from Congress, giving presidents the power to negotiate reductions in tariffs with other nations.
In his memoirs, Hull wrote of his pride at seeing FDR sign the Reciprocal Trade Agreements Act of 1934. “At 9: 15 on the night of June 12 I watched the President sign our bill in the White House. Each stroke of the pen seemed to write a message of gladness on my heart…"
Abominable tariffs
In the days when Congress made the crucial decisions on setting tariff levels, the process devolved into a spectacle of favor-seeking lobbyists from every major industry seeking to exert influence. The U.S. had to endure the “Tariff of Abominations,” the “Mongrel Tariff,” the “McKinley Tariff” and the “Hawley-Smoot Tariff.”

The 1883 ‘Mongrel Tariff’ affected 14 different categories of goods, Irwin wrote. He quoted a later writer, Matthew Josephson describing the scene when the bill was drafted: “lobbyists descended like a flock of buzzards upon Washington, crowding all the hotels that winter, pulling, tugging at the statesmen in the name of all the diverse, conflicting interests that employed them…as committeemen in both chambers wrestled with long schedules and with the unblushing and, unending demands of lobbies for sugar, iron, wool, glass, marble and a hundred other trades.”
Hull’s intervention changed the game. While presidents can certainly be lobbied, they are at least theoretically responsible for the nation’s interests, rather than the more local and regional interests to which members of Congress must pay heed.
That said, a revival of tariffs by Trump could put the president at the center of furious bargaining with the leaders of other nations and with executives from a huge number of industries.
Whether Trump really will significantly reverse the decline of tariffs is an open question. For the moment at least, Hull’s achievement stands.
Irwin’s book quotes Senator Paul Douglas’s tribute to Hull: “Thus, the shrewd, hillbilly free trader and militia captain from the Tennessee mountains outwitted for beneficent ends the high-priced protectionist lawyers and lobbyists of Pittsburgh and Wall Street.”
Thanks for insights on Cordell Hull and free trade. Those apt to serve as Hull in Trump presidency? Musk? Ramaswamy? Or Scott Bessent, the treasury designee, who said this week failure to extend Trump high-end tax cuts would have "disastrous" effect on economy and there is no need to hike the $7.25 federal minimum wage?
It will cost his supporters also. They will not be happy when the surprise rise in prices go into effect. He told them he would LOWER prices. One more lesson for them regarding trump…..when he opens his mouth is telling you lies. Regretting your vote won’t bring down prices. You will have to live with it for years.