President Trump plunged the global economy into chaos on April 2 by announcing a wave of tariffs on U.S. imports. In a made-for-TV announcement from the White House's Rose Garden, the president declared "Liberation Day," which Trump predicted Americans would celebrate for generations to come as the moment when "American industry was reborn, the day [when] America's destiny was reclaimed and the day that we began to make America wealthy again."
The stock market disagreed.
The Dow Jones Industrial Average has gone on a wild ride ever since, as investors try to anticipate the next move in an age of government by presidential fiat. One moment everyone gets a tariff, the next, import duties are temporarily suspended for some nations, but not others. As I write this, I have absolutely no idea what will transpire over the next few days before these words appear in print.
And there's the rub. To be sure, the stock market is not the economy. But the extreme volatility in global indices reflects deep uncertainty. Market chaos can cause a recession because it increases the perception of risk for businesses and consumers alike. Who wants to buy a new car when you're afraid that you might not have a job next month? Why hire more workers when you're worried that you're going to have to downsize operations because your products have been taxed out of overseas markets?
Many Americans are justifiably worried about their financial future. Workers watching their retirement accounts crash in real time have questioned the wisdom of the Trump administration's tariffs. Trump has no time for doubters. He took to social media to ridicule his critics as "PANICANS," dismissing them as "weak and stupid" people who threatened to undermine his tariff adventure.
Trump is not the first president to stake his political future on economic warfare. And, if the past is any guide, he is in for a rough ride in his second term.
Thomas Jefferson made the same mistake over 200 years ago. After comfortably winning re-election to a second term in 1804, the public backlash that followed the Virginian's disastrous trade policy embodied by the Embargo and Nonintercourse Acts meant that he couldn't wait to leave the White House in 1809.
The Napoleonic Wars (1803-15) created both opportunities and challenges for American businesses. The conflict, which pitted the British Empire against the French Empire under Napoleon, allowed the U.S. merchant marine to rapidly expand in the first decade of the 19th century. As the British and French sought to blockade one another into submission, neutral American merchant ships increased their share of overseas trade. But the French and the British tried to prevent wartime contraband trade that helped to sustain their enemies, putting American ships and sailors in harm's way.
The French Navy and particularly Britain's Royal Navy — after its decisive victory at the Battle of Trafalgar in 1805 — pursued aggressive policies to board neutral trading vessels to seize contraband goods destined for enemy ports. Moreover, the Royal Navy seized American sailors and forced them to serve aboard British warships in a system called "impressment." The British government claimed — not without some justification — that Royal Navy deserters often ended up working aboard American merchant ships. But the British Crown also refused to accept that its subjects could voluntarily become naturalized U.S. citizens.
The Jefferson administration hit upon commercial policy as the means of forcing Britain and France to respect the United States' neutral trading rights. While Jefferson believed that free trade had the power to promote peace and friendship among nations, he also saw restrictive commercial policy as a humane alternative to war. "Peaceable coercion" meant applying economic pressure on the British and French by restricting their access to the American market.
Though the Embargo Act of 1807 was not a tariff, it relied upon the same logic that underpins the Trump administration's 2025 economic policy: playing chicken with trade to force your adversary to change tack. But neither Britain nor France blinked.
The Embargo Act suspended the operation of the merchant marine and devastated the U.S. economy. The United States was an overwhelmingly agricultural society in the early 19th century. On farms and plantations across the nation, crops spoiled, unable to reach their markets in Europe or the Caribbean. Moreover, American merchant ships did not merely convey produce and goods around the world in the 1800s, they also employed tens of thousands of sailors and countless other workers in related industries like shipbuilding and ropemaking. With the ships tied up in port, ordinary Americans suffered economic hardship. And their sacrifices were for naught.
Jefferson and his Democratic Republican Party soon paid the political price of their misguided policy. The president received numerous letters from distressed Americans, including one desperate sailor from Philadelphia, a father of four, who threatened to cut his own throat, denying the United States "one of the best seamen who ever sailed" if Jefferson did not lift the embargo. Nationally, the Democratic Republican Party's vice-like grip on Congress began to slip. For the first time in almost a decade, the rival Federalist Party made gains in both the House and Senate, in large part because of the effects of the embargo.
Jefferson gladly retired to Monticello in 1809, leaving a mess for his protégé James Madison to clean up. Madison never did get "peaceable coercion" to work. And with the electoral fortunes of his party sinking further, the Madison administration abandoned economic warfare in favor of the real thing in June 1812 when Congress declared war on Great Britain.
Rather than blithely dismissing the fears of ordinary Americans as unpatriotic and idiotic, President Trump would do well to listen to their genuine concerns if he wants to leave the White House on good terms with the American people. His incoherent tariff policy risks sparking a recession, which ordinary people can ill afford so soon after the devastating economic effects of a global pandemic. And the disastrous consequences of Trump's tariffs will pale in comparison to the fallout from an armed conflict that could all too easily follow from an all-out trade war. ♦
Lawrence B.A. Hatter is an award-winning author and associate professor of early American history at Washington State University. These views are his own and do not reflect those of WSU.
