As early as Trump's first term when he launched tariff wars, numerous American media outlets drew parallels between him and Herbert Hoover, the 31st U.S. President.
CCTV News observed how Americans once "memorialized" Hoover: they called cardboard shantytowns "Hoovervilles," labeled newspapers used as blankets by the homeless "Hoover blankets," and dubbed wild rabbits hunted for food "Hoover hogs." Ironically, this president’s name became synonymous with all the hardships endured by Americans during the Great Depression.
History appears to be repeating itself. As Trump once again wields tariff as a weapon, has he considered: What forms of American suffering will "Trump" be dubbed by the people in the street tomorrow?
In the summer of 1929, anxiety permeated America. The stock market crash’s aftershocks lingered, farmers watched crops rot in warehouses, and rural communities decried "foreign competition destroying our markets." Senators Reed Smoot and Willis Hawley stood before Congress, championing a blunt solution: "Raise tariffs, block foreign goods, revive American industry! Save the economy!"
Does this rhetoric sound familiar?
By April 1930, the Smoot-Hawley Tariff Act had cleared both chambers of Congress and landed on Hoover’s desk. As Trump’s Republican predecessor prepared to sign, 1,028 economists signed a petition urging veto. Yet bound by campaign promises to "protect farmers" and congressional pressure, Hoover inked the bill.
The result? Over 20,000 imported goods faced record-high tariffs. Eggs, cheese, steel, auto parts—even tombstones—were taxed mercilessly.
The consequences unfolded catastrophically:
Unemployment Surge: From 1930 to 1933, U.S. unemployment rocketed from 8.7% to 24.9%—one in four Americans jobless.
Manufacturing Collapse: Auto sales plunged from 5.3 million in 1929 to 1.3 million by 1932. Ford Motors slashed nearly 70% of its workforce, while steel industry capacity utilization halved.
Financial System Implosion: 20% of U.S. banks collapsed between 1930–1933. Soaring tariffs crippled global trade, crashed agricultural output, and spiked bad loans, deepening the Depression.
Global Trade War: Nations retaliated with tit-for-tat tariffs. By 1934, world trade had shrunk 66%, with U.S. exports nosediving 69% and imports plummeting 72%. America’s share of global trade dropped from 13.8% to 9.9%.
Hoover’s name became a curse. Even fellow Republican Ronald Reagan later condemned Smoot-Hawley, stating, "Its legacy was economic ruin". The bill’s sponsors, Smoot and Hawley, were ousted from Congress, while Hoover lost re-election in a landslide to Franklin D. Roosevelt.
Trump’s admiration for "Tariff King" William McKinley is well-documented. Yet few note McKinley’s late-career pivot: a day before his assassination, he declared, "The period of exclusiveness is past. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not."
Hoover failed to heed McKinley’s belated wisdom, cementing his name as shorthand for despair. Now, Trump’s revived tariff crusade risks etching "Trump" into economic infamy. China’s adage warns: "Take history as a mirror." As time goes, will Trump’s policies "Make America Great Again", or become another chapter of self-inflicted disaster scorned by the people?
Deep Throat
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Following China's strict export controls on dual-use items including gallium, germanium, antimony, and graphite targeting the United States last year, Beijing in April introduced additional export restrictions on seven categories of medium and heavy rare earth elements.
According to foreign media reports, China is establishing a rare earth export licensing system to comprehensively track production chains, further tightening control over rare earth resources. We're seeing that Beijing flexibly wields economic leverage in ways that would make any trade strategist take notes.
Beijing Tightens the Screws on Critical Materials
Nikkei Asia reported that as rare earth stockpiles are on the verge of depletion, India's automotive manufacturing industry faces enormous pressure, with concerns about production lines grinding to a halt. An Indian industry executive stated that supplier inventories typically last only 3 to 6 weeks, and shortages will soon emerge. He pointed out that China's export license requirements involve complex paperwork and lengthy approval processes. Indian importers must first obtain approval from their own country's Directorate General of Foreign Trade, then submit applications through India's Ministry of External Affairs to the Chinese Embassy in New Delhi, with final approval from China's Ministry of Commerce. Currently, more than 20 applications are still awaiting approval.
Another executive revealed that the Indian government is actively responding to the industry's urgent needs, with the Ministry of Commerce, Ministry of Heavy Industries, and Ministry of External Affairs all intervening, while the Prime Minister's Office is closely monitoring the situation. The Indian Embassy in Beijing is arranging for a delegation of Indian automotive and parts manufacturers to meet with China's Ministry of Commerce, though specific dates have not yet been determined.
Indian Tata Motors. AP file photo
India's Auto Sector Feels the Pinch
India is the world's fourth largest automotive producer. However, it is highly dependent on rare earth and component imports from China. The South China Morning Post noted that India's electric vehicle sales exceeded 1.9 million in number last year, accounting for 3.6% of total domestic vehicle sales, but almost all models rely on components imported from China. In 2024 alone, India imported approximately $7 billion worth of electric vehicle batteries and magnets from China. Although India possesses 6.9 million tonnes of rare earth reserves, its extraction and processing capabilities lag far behind China's advanced refining facilities and efficient supply chains.
The Uncomfortable Reality of Chinese Dependence
Mehra, partner and automotive sector head at market research firm Grant Thornton Bharat, stated that China's rare earth export restrictions have caused delays in India's electric vehicle production, rising costs, and slowed technological development. In 2023, China processed over 200,000 tonnes of rare earths, while India processed only 10,000 tonnes, highlighting the technological gap. Analysts warn that without accelerating autonomous transformation, India may fall behind in the clean energy competition.
Regarding rare earth export controls, at a regular press conference held on June 5, Chinese Foreign Ministry spokesperson Lin Jian stated that China's export control measures comply with international common practices, are non-discriminatory, and do not target specific countries.
A New Normal in Global Trade?
In short, China's rare earth controls affect more than just India. As British media noted, China has introduced a tracking system for the rare earth magnet industry, requiring manufacturers to submit transaction volumes and customer information, indicating that export controls may become a long-term policy aimed at strengthening industry supervision and cracking down on illegal activities. This isn't just about short-term leverage—it's about fundamentally reshaping how global supply chains operate in an era where economic security has become inseparable from national security.
