By Tom Warburton
Tariffs have been around just about as long as people have been trading across borders.
Whether it was at a port in 18th-century Europe or a modern container terminal in Long Beach, countries have used import taxes to raise revenue, protect homegrown industries or send a message to trading partners.
Across history — and across the world — tariffs have shown up in one form or another.
These days, tariff talk gets pulled into politics fast. That’s not my aim here. I’m not taking sides.
I simply want to take a step back and look at how tariffs have played out over time — what they’ve meant for everyday consumers, businesses and markets. And to be upfront, we don’t have enough hard data to say with confidence how effective — or destructive — they really are in the long run.
A long history of short-term fixes
Go back to the 1800s, and you’ll find tariffs helping young industries find their footing. The U.S. Tariff of Abominations in 1828 helped Northern factories but upset Southern farmers.
In 1930, the Smoot-Hawley Tariff Act raised duties on thousands of imports during the Great Depression. That move, widely blamed for worsening the downturn, sparked international retaliation and slowed trade to a crawl.
After World War II, global thinking shifted. The General Agreement on Tariffs and Trade — GATT — was formed in 1947, followed by the World Trade Organization in 1995. Both worked to reduce trade barriers. Still, tariffs never disappeared. President George W. Bush put them on imported steel in 2002. And in 2018, the U.S. and China started trading blows with tariffs that caught the market’s full attention.
The trade-offs
Tariffs often come with good intentions — protect local jobs, level the playing field, challenge unfair practices. But they usually come at a price. Consumers pay more for everything from groceries to electronics. Businesses that rely on global suppliers face higher costs and tighter margins.
Sometimes, tariffs hang around longer than planned. The U.S. sugar program, launched in 1934, is still with us. Once an industry gets protection, it rarely gives it up.
Over the years at Warburton Capital, we’ve seen how policy decisions — especially those wrapped in headlines — can ripple through the portfolios and outlooks of everyday investors.
That said, it’s tough to draw blanket conclusions. Some tariffs hit their mark; others miss. Global economies are complex, and every policy plays out a bit differently. While we can spot patterns, it’s hard to say whether tariffs help or hurt over time.
Wall Street pays attention
Markets don’t like uncertainty, and tariffs create plenty. During the 2018–19 U.S.–China trade conflict, the Dow might lose 500 points after a tariff threat and recover by the close on a softening statement. Tech stocks, in particular, took the brunt due to their global exposure.
Even recently, new tariff talk has rattled sectors like semiconductors and autos. These aren’t minor blips — they show how deeply global trade is woven into company operations and investor sentiment.
Still, markets adjust. Over time, capital shifts, supply chains reroute, and the immediate drama fades. That’s why it’s hard to trace long-term market performance back to any single tariff policy.
Where we stand now
Tariffs aren’t good or bad in themselves. They’re tools. It depends on how — and when — they’re used. As the U.S. turns its focus inward and talks more about reshoring and resilience, tariffs are once again in the spotlight.
Will they reshape the economy? Ease inflation? Rattle investors? We just don’t know yet. What we do have is history — and a reminder that outcomes are rarely simple and never guaranteed.
