Reagan warned against tariffs, Trump weaponises them: The high cost of short-sighted trade wars

When Ronald Reagan spoke about tariffs, he didn’t just offer a policy position — he delivered a warning grounded in history, principle and a genuine understanding of economics. His words, echoing the painful memory of the Great Depression, were not just aimed at short-term political applause. Reagan believed in protecting American prosperity not through isolation, but through responsible engagement with the global economy.

In stark contrast, Donald Trump’s threat to impose “substantially” higher tariffs on Indian goods — driven by accusations that India profits off Russian oil — is not only economically unsound but strategically shortsighted. This approach reveals Trump as a president wielding power without the wisdom or foresight of his Republican predecessor. Interestingly, Reagan was as much a Republican as Trump believes he is—if not more.

Reagan’s pragmatism: Lessons from history

Reagan’s views on tariffs were shaped by the catastrophe of the Smoot-Hawley Tariff Act of 1930, which raised US tariffs on thousands of imported goods. Rather than protect American jobs, it triggered a trade war, deepening the Great Depression.

Reagan explained: “High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers, and less and less competition.”

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He took protectionism, while politically tempting, as economically destructive. He warned that businesses would grow complacent, relying on government protection rather than innovation. The result, he said, would be collapsing markets, shuttered industries and “millions of people losing their jobs.”

What made Reagan’s approach wise was not just that he opposed tariffs — he understood the domino effect. Retaliatory tariffs would hurt American exporters and sabotage global supply chains. He also viewed trade as more than economics: it was a tool of diplomacy, soft power and mutual prosperity.

Trump’s reactionary tariff threats

Trump’s proposed 25 per cent tariff on Indian imports is not based on an economic assessment — it is a geopolitical tantrum. His rationale is tied to India’s purchase and re-export of Russian oil, a practice he characterises as profiteering from human suffering in Ukraine:

“They don’t care how many people in Ukraine are being killed by the Russian War Machine… Because of this, I will be substantially raising the Tariff paid by India to the USA.”

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In this, Trump demonstrates neither a consistent principle nor a strategic objective. His argument disregards the broader global context — India began purchasing discounted Russian oil not to turn a profit, but because Western markets redirected their own imports. India stepped in to stabilise its energy needs, something the US itself encouraged in 2022 to prevent global price shocks.

Furthermore, Trump’s characterisation of India as part of a “dead economy” and his threat of an unspecified “penalty” betrays his tendency to use trade as a weapon of personal grievance. But unlike Reagan — who considered the long-term ripple effects of protectionist measures — Trump reduces complex geopolitical dynamics to a simplistic punishment-reward framework.

India: A partner, not a pawn

India is not a geopolitical lightweight or a trade manipulator. It is the world’s most populous country and a major economic force, and its neutrality in the Ukraine conflict reflects its strategic autonomy. As India’s Ministry of External Affairs in its official response, “India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation.”

The statement further notes that the US and EU themselves continue significant trade with Russia. Europe’s imports of LNG from Russia hit a record high in 2024, and US continues importing Russian uranium and palladium. Yet Trump singles out India, ignoring these facts — a move that reeks of political theatre rather than coherent policy.

More importantly, India is a crucial partner in counterbalancing Chinese influence in Asia. Damaging India-US trade relations undermines America’s strategic interests in the Indo-Pacific. Reagan, a staunch believer in US alliances and coalitions, would have seen this. Trump, in contrast, alienates allies to serve his own political narratives.

Reagan: Leadership based on economic responsibility

Reagan was not afraid of confronting unfair trade practices, but he did so with surgical precision, not a sledgehammer. He resisted the political pressure to erect broad tariffs, even when it was unpopular: “There are those in the Congress… who want to go for the quick political advantage, who risk America’s prosperity for the sake of a short-term appeal to some special interest group…”

He understood that more than five million American jobs were tied directly to exports and that even more were linked to imports — a reality Trump often disregards in his unilateral declarations. While Reagan was strategic, Trump is scattershot. While Reagan sought prosperity through global engagement, Trump seems to use trade policy as an extension of personal vendetta.

Tariffs as political theatre

Trump’s tariff threats appear to be more about showmanship than strategy. His attacks on India coincide with his political campaign, where populist posturing and nationalist rhetoric score quick applause. Yet, as Reagan warned: “Sometimes, for a short while, [tariffs] work, but only for a short time.”

Any short-term political gain from appearing “tough on India” comes at the cost of long-term economic damage. Higher tariffs on Indian imports will likely trigger reciprocal measures from New Delhi, harm American exporters, raise consumer prices and strain a vital bilateral relationship.

If Reagan believed tariffs should be a last resort, Trump uses them as a first instinct. This reveals not just a difference in policy, but a difference in temperament — one guided by history and humility, the other by impulsiveness and antagonism.

A question of wisdom

What separates a president from a statesman is the ability to look beyond the next election cycle. Reagan governed with the memory of the Depression and with an eye toward global stability. Trump, by contrast, seems governed by instinct and anger.

Reagan warned against “subsidising inefficiency and poor management” through tariffs. Trump, ironically, now wants to penalise an efficient Indian oil trade that is legally supplying refined fuels to Western markets — including US — because it offends his view of the Ukraine war.

Such contradictions show that Trump is not applying a coherent policy but reacting emotionally. That makes him, at best, just a president — someone who wields the office, but without the measured leadership or wisdom of another Republican who once sat in the Oval Office.

Pragmatism vs populism

The difference between Reagan and Trump is not simply a matter of ideology — both were Republicans, both campaigned on strong leadership and both sought to protect American interests. But Reagan did so with prudence and perspective. Trump, on the other hand, does so with provocation and unpredictability.

Reagan stood firm against protectionism not because it was easy but because it was right. He knew that tariffs could destroy prosperity. Trump, by contrast, seems content to use tariffs as weapons — often pointed not just at adversaries, but at allies like India.

It’s one thing to be a president. It’s another to be a leader with the maturity and vision to steer a superpower through complex global realities. In that comparison, Trump falls well short of Reagan.