While Smoot’s tariff delivered short-term benefits to Utah producers, it also triggered international retaliation and a collapse in global trade. World sugar prices crashed. Domestic markets became glutted. Utah’s sugar producers were soon forced to sell assets, take emergency loans and underpay farmers. By 1933, the Utah-Idaho Sugar Company was relying on federal assistance and LDS-backed loans to survive, and Senator Smoot had been replaced by Democrat Elbert D. Thomas. In the end, the costs of the global trade collapse likely outweighed the temporary protection the tariff provided, even for Senator Smoot and his allies in the “Farm Bloc.”

After World War II, the United States took a different approach. Seeking to rebuild a shattered global economy and avoid the trade wars of the 1930s, U.S. leaders spearheaded the creation of the General Agreement on Tariffs and Trade (GATT) in 1947. Rather than abandoning Smoot-Hawley era high tariffs outright, the U.S. used them strategically as bargaining tools, offering to lower duties in exchange for reciprocal reductions by other countries. Tariffs originally implemented to serve special interests were retooled to advance the general interest.

The GATT framework came with short-term tradeoffs. American firms faced increased competition, and some industries struggled to adjust. But over time, this liberalized system laid the foundation for an era of unprecedented global economic growth. Trade expanded, prices fell and international cooperation deepened. In contrast to the protectionist spiral that followed Smoot-Hawley, GATT demonstrated how coordinated, rule-based trade policy could deliver widely shared, long-term benefits. Both the Smoot-Hawley and early GATT approaches relied on the leverage of high tariffs, but their purposes differed: the former served narrow special interests, while the latter aimed at promoting a market-based global trading system that tends to raise all tides.

We’ve recently observed a dissociative version of similar events. Much of President Trump’s rhetoric has aligned with the idea of restoring a fair, market-based global trading system, reducing trade barriers faced by exporting American producers and confronting unfair foreign practices. He even briefly displayed uncommon political courage by acknowledging that Americans would likely face short-term pain for long-term gains. (More recently, POTUS has demanded that retailers like Walmart “eat the tariffs,” apparently without realizing or caring that such behavior on the part of retailers would halt progress toward an earlier stated goal: increased American production.)

At the same time, special interests smell blood in trade-war waters. As reported by The Free Press, the CEO of Freight Technologies, a cross-border logistics firm, publicly announced the company was purchasing $TRUMP meme coins (a cryptocurrency), as a way to “advocate for fair, balanced, and free trade” with Mexico. Free trade should serve the general interest, not be reduced to a side quest in the meme economy. If trade policy becomes a competition to curry favor by “hodling” $TRUMP, then ABUSA may become the preferred strategy of global investors. (Curious readers may wish to Google some of the terms in the previous sentence.)

The real trade war, fought between the general interest and special interests, was a favorite example of the Nobel Prize-winning economist Mancur Olson. He argued that small groups with concentrated benefits have a much easier time organizing politically. Smoot’s tariffs are a textbook example — Utah beet growers represented a well-defined small group that stood to gain significantly, so they organized and lobbied successfully for protection. Meanwhile, the short-term costs of targeted tariffs — higher prices on sugar and related goods — were spread across millions of American consumers and politically barren foreign producers. Individual consumers bore only a small burden, and thus had little incentive to fight back. But the immediate pecuniary cost of those higher prices was only the beginning.

The much larger danger lies in what follows: the incentives created for others to seek similar favors. If one industry sees that beet growers secured a tariff, they’ll try too. If the CEO of one firm gets invited to dinner at the White House for buying enough $TRUMP tokens, other CEOs will follow suit. The result isn’t just economic inefficiency, it’s a political arms race of what economists call “rent-seeking,” where influence replaces innovation, and favoritism takes the place of a rules-based market order: a far cry from a merit-based economic system that President Trump and his allies often purport to support.

Gavin Roberts is an associate professor of economics and chair of the economics department at Weber State University. He is a recipient of the Gordon Tullock Prize from the Public Choice Society and regularly shares his research locally, nationally and internationally. This commentary is provided through a partnership with Weber State. The views expressed by the author do not necessarily represent the institutional values or positions of the university.