A trade war is an economic conflict where nations impose tariffs or other trade barriers on each other in retaliation for similar actions.

The Smoot-Hawley Tariff Act—which was passed during the Great Depression with the goal of reviving domestic industry—is among the most famous pieces of economic legislation in US history.

Tariffs once fueled the US economy, historically serving as a primary source of revenue and a means to protect domestic industries.

Track how American tariffs have impacted different countries and industries.

An economic evaluation of US tariffs

Most economists agree that the implementation of large-scale tariffs on foreign goods would hurt both the American and global economies. This video from The Wall Street Journal explains the rationale for tariffs as a tool for domestic job creation, but explains why they may hurt the overall economy.

Trump's 2025 tariffs represent a significant break from the rules-based trade order

The Trump administration imposed broad tariffs on other countries outside WTO rules in 2025, claiming that those countries had long violated trade agreements and that the US was simply leveling the playing field.

Listen to a podcast episode that outlines 250 years of world trade history.

Trade between the US and China has significantly increased in recent decades.

See a chart showing how US tariff revenue has grown in recent years.

The overall economic effect of President Trump's 2025 tariffs remains unclear

Researchers from UCLA and Yale found that tariff revenue and gains to US producers largely offset importers' costs—but the broader picture is murkier, as the trade deficit rose, manufacturing jobs declined, and 90% of tariff costs were passed through to importers rather than absorbed by foreign exporters.

Policymakers make complex trade-offs when considering tariffs—while they can generate government revenue and encourage the consumption of locally produced goods, they can also lead to higher consumer prices and may negatively impact economic growth.

Behind the scenes on tariff politics

Economist Gene Grossman joined the Trade Talks Podcast to discuss why tariffs really happen. The episode digs into how voters, politicians, lobbyists, and even campaign cash can affect when protectionist trade policies are put forward. Produced in 2019, the podcast also discusses how populist trade policies and identity politics accounted for Donald Trump’s victory in the 2016 Presidential election.

Read an overview of US tariff policy before the second Trump Administration

This comprehensive report from the Congressional Research Service explores the evolving role of tariffs—from a major source of government revenue to a tool for trade and foreign policy—providing insights into current practices, legal foundations, and global trade dynamics.

The history of tariffs stretches back to ancient Rome and Greece, where taxes were levied on imported grain and textiles to control trade.

The Great Depression was an international depression felt far beyond the US

Many countries suffered through a depression in the 1930s that the First World War, the US stock market crash, and an economic downturn in Germany turned into an international crisis.

Tariffs are typically paid by the importing company or organization to the US Treasury.

How do tariffs work?

This brief animated video from Time walks through a simple example of a tariff on a single good, illustrating how this would affect the market for the good—both domestically and abroad—and who would eventually bear the cost of the tariff.

Tariffs are taxes levied on goods imported from abroad.

The General Agreement on Tariffs and Trade and its successor, the WTO, was formed to reduce trade barriers between nations.

The GATT and its successor, the WTO, were established to lower trade barriers

Signed in 1947, the General Agreement on Tariffs and Trade began systematically reducing tariffs and trade barriers among member nations. In 1995, it was replaced by the World Trade Organization, which expanded those rules and established a formal dispute settlement system.

Explore over a century of US-Canadian relations.

Some argue that the rising US national debt has become more important in recent months.

The Great Depression is one of history's most notable periods of deflation

The stock market crash of 1929 helped trigger a period of deflation in the United States by creating a drastic decrease in the total money supply. Because of the United States' central role in the world economy, virtually every single country was impacted by the recession.

The US exported $426.3B in goods to Canada and imported $453.6B in goods from Canada in 2025.

China's WTO membership produced significant disputes

Two decades after China joined, its trade practices—such as state subsidies, intellectual property disputes, and market access restrictions—have sparked accusations that it has not fully met WTO commitments of free and open trade.

Auto and consumer goods companies absorbed billions in costs due to President Trump's 2025 tariffs.

Global trade volume is roughly 45 times what it was when the General Agreement on Tariffs and Trade was founded

Since 1950, world trade values have grown nearly 410 times, mainly due to the successive tariff reductions negotiated under GATT and the WTO.

The failures of the interwar period made the case for a new international system

After World War I, countries devalued their currencies, raised tariffs to block imports, and seized territory unchecked, with the international community unable to organize effectively to stop them. The result was a global depression and, eventually, another world war.

Japan's imperial expansion in Asia in the 1930s set the stage for war with the US.

,

Key moments that shaped the national debt include the Civil War, both World Wars, the 2008 recession, and the COVID-19 pandemic.

The US war on drugs, explained

The United States has been fighting a global war on drugs for decades. By making drugs more expensive and less available, the US has sought to reduce drug use and inhibit the international drug trade. However, increasing prison populations,...

Tax policy can have a direct impact on the national debt, with past presidents' changes to tax codes inflating the deficit.

The Supreme Court ruled in February 2026 that Trump's emergency tariff powers didn't extend to imposing tariffs

In a 6-3 decision, the court held that the International Emergency Economic Powers Act—a 1977 law granting the president authority to regulate commerce during national emergencies—does not authorise the president to unilaterally impose tariffs, a power the Constitution reserves to Congress.

President Trump's 2025 Tariffs added less inflationary pressure to the economy than expected in their first year

A year after the so-called "Liberation Day" in April 2025, tariffs have had a milder effect on inflation than feared—core goods prices have added only about 0.2% to the headline Consumer Price Index—but persistent policy uncertainty has rattled small business owners, who say the constant back-and-forth makes long-term planning difficult.

The US unemployment rate soared to over 24% during the Great Depression, the highest in recorded history.

A short history of the China-Taiwan conflict

The relationship between China and Taiwan is a fraught one, and has been for well over a century. US involvement has only raised the stakes between the independent island country, also known as the Republic of China, and the larger country on the mainland. Here's a breakdown of the conflict between China and Taiwan over the years.

The story of the Wall Street Crash of 1929

The 1920s in the US "roared" with rapid economic growth after the conclusion of World War I. But in October 1929, the bubbly stock markets crashed dramatically, plunging the nation into the decadelong Great Depression.

The history of the World Trade Organization

This episode of the "Brettonomics with Nancy Jackson" podcast explores the history of the WTO and its predecessor, the GATT, revealing the key people, negotiations, and decisions that shaped today's international trade rules.

Congress has formally declared war 11 times across five conflicts, the last in 1942

The five declared wars were the War of 1812, the Mexican-American War, the Spanish-American War, World War I, and World War II. Every major American military conflict since Korea, Vietnam, Iraq, and Afghanistan has been fought without a formal declaration.

The US apparel and textile industry was long set up to limit competition from nations in the developing world—but shifts in international trade regulation in the 1990s changed that, paving the way for the fast fashion industry to develop.

A formal declaration of war automatically triggers hundreds of statutes granting the president sweeping domestic authority

Beyond authorizing military force abroad, a formal declaration activates a wide range of domestic powers, including authority over enemy property, trade restrictions, and emergency economic authority. It also waives the 60-day time limits under the War Powers Resolution.

The Tariff Act of 1789 was one of America's first acts.

Markets have always recovered and hit new highs following crashes

The crash that preceded the Great Depression was the most severe the US has ever experienced. It was 28 times worse than the downturn that followed the Cuban Missile Crisis.

The US launched the Global War on Terror after 9/11

In the wake of 9/11, the US declared a Global War on Terror—initiating military operations in Afghanistan and Iraq, expanding surveillance, and forming international coalitions to combat terrorism and disrupt extremist networks worldwide.

World War I brought attention to US reliance on mineral imports

Domestic stockpiles were inadequate for the extended trade disruptions caused by the four-year war. In response, the US Geological Survey increased its geological mapping to help search for important metals alongside new oil fields for fuel.

The WTO is the global body that sets and enforces the rules of international trade

Founded in 1995, with 164 member countries, the WTO negotiates trade agreements, resolves disputes between nations, and aims to reduce barriers to international commerce.

US inflation can generally be split into to two periods—before and after the Federal Reserve

A central bank itself does not mean significant inflation will occur, but economists generally point to factors like two world wars and the printing of money to finance the US federal deficit as primary drivers of price increases.

The US has carried debt since 1791

After the Revolutionary War, the US owed $75M to nations like France. Debt builds when spending exceeds revenue, funding programs, wars, and economic recovery efforts. Most debt is domestic, like Social Security bonds, with foreign nations also holding a share.

The UK was already in a depression before the US Great Depression took hold

The US Great Depression was felt globally, but the severity and length of different countries’ economic downturns varied. For instance, Japan was the first country to exit its depression.

Governments have historically used counterfeiting for economic warfare

Inserting fake currency into an economy can help destabilize it. During the American Revolution, for instance, the British distributed counterfeit “Continental Dollars” in an effort to devalue the currency being used in the US at the time with the goal of undermining America’s growing financial credibility. The Nazis also ran an extensive counterfeiting scheme during WWII.

The global economy runs on US dollars, with nearly 90% of international trade in 2019 being processed in US dollars.