A brief history of tariff wars

In a dramatic escalation, US President Donald Trump announced sweeping new tariffs on Thursday, including a 37% levy on Bangladeshi goods.

The US' latest move is part of a broader strategy to impose "reciprocal tariffs" — mirroring the duties that other nations place on American exports.

With sharp increases on imports from India, China, and the European Union, the new policy marks a shift away from decades of trade liberalisation.

But this is not the first time the world is witnessing tariff conflicts. Similar trade wars have occurred throughout history, with mixed results.

For centuries, countries around the globe wielded tariffs as both an economic weapon and a bargaining tool. From early protectionist policies by the US and some European countries to Cold War-era trade manoeuvres, the world has come across a long history of using import duties that shaped global commerce.

Méline Tariff (1892)

Introduced under the leadership of French Prime Minister Jules Méline, this protectionist policy aimed to shield French agriculture and industry from foreign competition.

The tariff significantly increased duties on imported grain, ensuring higher prices for domestic farmers but making food more expensive for consumers. While it reinforced the rural economy in the short term, the policy strained France's trade relations, particularly with grain-exporting nations like Russia and the US.

Over time, it contributed to economic inefficiencies, limiting competition and innovation within the French market. The tariff remained in place for years but ultimately proved unsustainable as global trade dynamics shifted.

Smoot-Hawley Tariffs (1930)
The Great Depression was already in full swing when President Herbert Hoover signed the Smoot-Hawley Act into law in June 1930. Aimed at protecting American farmers, the act ended up raising tariffs on a vast range of goods, sparking retaliatory measures from countries like Canada, France and Spain.

The result was a sharp decline in global trade. By 1933, US exports had plummeted by 61%, further deepening the economic crisis.

The policy was widely seen as a failure, and President Franklin D Roosevelt later worked to reverse its effects through bilateral trade agreements.

Anglo-Irish Trade War (1932-1938)

Tensions between Britain and Ireland escalated in 1932 when Éamon de Valera's government stopped paying land annuities — payments owed to Britain under earlier agreements.

In response, the British imposed steep tariffs on Irish agricultural exports, particularly cattle, striking a major blow to Ireland's economy.

Dublin retaliated with duties on British coal and manufactured goods, leading to economic strain on both sides. The dispute dragged on for six years, hampering trade and worsening hardships during the global depression.

The deadlock was finally broken in 1938 when a settlement restored trade relations, though economic scars lingered for years.

Chicken War (1960s)

Following World War II, American chicken production soared, flooding European markets with cheap poultry. European farmers, unable to compete, lobbied their governments for protection.

In 1962, the European Economic Community (EEC) imposed tariffs on US poultry imports. The US, under President Lyndon B Johnson, retaliated with tariffs on European goods, including light trucks.

The so-called "chicken tax" remains in place today, shaping the automobile industry by incentivising foreign manufacturers to set up production in North America.

Lumber war with Canada (1982–Present)

The US and Canada have been at odds over softwood lumber for more than four decades. The disagreement stems from Canada's government-controlled pricing system, which the US argues constitutes an unfair subsidy.

The dispute has led to multiple rounds of tariffs and retaliatory measures. Even before Trump's recent tariff threats, Canadian lumber faced a 14% tariff when entering the US.

The conflict remains unresolved, with periodic escalations affecting trade relations between the two neighbours.

US-Japan auto tariffs (1987)

In 1987, President Ronald Reagan imposed 100% tariffs on $300 million worth of Japanese goods, targeting automobiles. This move was meant to punish Japan for failing to comply with a semiconductor trade agreement aimed at giving US companies better access to the Japanese market.

Japan refrained from retaliating immediately, hoping to avoid further damage to trade relations. However, the yen appreciated, and Japanese exports declined, contributing to an economic slowdown that lasted well into the 1990s.

The Banana War (1993–2012)

In 1993, the European Union imposed tariffs on bananas from Latin America, which favoured producers from its former colonies in the Caribbean and Africa.

The US, defending the interests of its multinational banana corporations, took the matter to the World Trade Organization (WTO) multiple times, each ruling in its favour. When the EU failed to lift restrictions, the US imposed retaliatory tariffs on European goods, including luxury items such as Scottish cashmere and French cheese.

The dispute finally ended in 2012 with a negotiated reduction in tariffs on Latin American bananas.

Steel war with Europe (2002)

To protect the struggling US steel industry, President George W Bush imposed tariffs ranging from 8% to 30% on imported steel in 2002.

While Mexico and Canada were exempt, European nations bore the brunt of the policy. In retaliation, the EU threatened tariffs on $2.2 billion worth of American goods, including oranges and motorcycles.

Fearing economic fallout, Bush lifted the tariffs in 2003, avoiding a full-scale trade war.

Trump's first trade war (2018)

Donald Trump's first term saw a significant escalation in global tariff conflicts. In early 2018, his administration imposed broad tariffs on solar panels and washing machines. Soon after, the US targeted Chinese imports, leading to a series of tit-for-tat measures.

China responded with tariffs on American agricultural products, affecting soybean farmers in the Midwest. The trade war contributed to market instability and increased costs for consumers.

Trump's new tariff war (2025)

In February 2025, Trump announced a 25% tariff on imports from Canada and Mexico. Justifying these measures, he cited concerns over drug trafficking, illegal immigration and trade deficits.

On 3 April, he expanded the list of affected countries, adding several more including Bangladesh, India, China, Vietnam, and the European Union.

While diplomatic negotiations led to a temporary suspension of tariffs for Canada and Mexico, the new policy remains in effect for Bangladesh, which of course, remains a serious threat to the country's textile industry.

This move heightens the risk of retaliatory measures from affected nations, further destabilising global trade.

While the Bangladesh government has yet to announce any official measures regarding the imposed tariff, Foreign Adviser Md Touhid Hossain expressed concerns about a potential escalation back in March. To mitigate the impact, he stated that Bangladesh will increase cotton imports from the US in an effort to avoid tariffs on its export goods