Economist Steve Hanke is not a fan of U.S. President Donald Trump’s tariffs, drawing a historical parallel between today’s economic conditions and the early 1930s by invoking the Smoot-Hawley Tariff Act and denouncing it as “the stupidest thing I’ve ever seen in my life.”
Trump’s Trade Levy Could Repeat 1930s Market Freefall, Warns Hanke
On the social media platform X, American economist Steve Hanke—celebrated for his applied economics research, currency-reform work and monetary policy expertise—has been unabashedly voicing his disdain for Trump’s tariff measures. On Sunday, he took to X and said, “According to my friend and former colleague David Stockman, [President] Trump’s proposed tariffs will increase input costs for American businesses by $500 [billion].”
He then added that “tariffs [equal] an economic wrecking ball” in all capital letters. In another X post which features a video of Hanke, the economist cautions that current economic policies mirror those of the early 1930s, when the Smoot-Hawley Tariff Act took effect. “And it’s something akin to what’s going on now, because, what was the environment in 1930? The money supply was contracting. That caused a slowdown in the start of the Great Depression,” Hanke remarked.
Hanke added:
Then, on top of that, you had the announcement of the Smoot-Hawley tariff in March that went into effect in July, and what happened? The market crashed, and the market, from the time of the announcement in 1930 at March until June, 1932, the low of the market. It lost 83%, the Dow did. So I think we’re in for rough times.
He further criticizes the Trump administration’s approach, suggesting that its advisors either misunderstand or underestimate the risks at hand. Trump’s casual dismissal of potential economic fallout, framing it as a minor or short-lived issue, reveals to Hanke a profound disconnect from historical precedent and monetary realities
“We’ve seen this movie before,” Hanke insisted in the video. “It’s clear that the people around Trump had no clue of what’s going on. Then Trump acts like it’ll be a little blip in a couple of days and so forth. If this doesn’t change, we’re in for a lot of trouble … And I would say diplomatically, this is the stupidest thing I’ve ever seen in my life. The U.S. is just creating enemies,” Hanke concluded.
