Economic historians generally agree that the infamous Smoot-Hawley Act of 1930, which sharply raised tariffs on more than twenty thousand goods produced overseas and exported to the United States, didn’t cause the Great Depression, but it did accentuate it. As other countries retaliated with import duties of their own, the volume of world trade spiralled down. At the start of 1930, world trade had been about $2.7 billion. By the beginning of 1932, it was less than $1.3 billion. Among the countries that imposed new duties on American exports were Australia, Canada, Cuba, France, Mexico, Spain, and New Zealand.

This tit-for-tat trade war depressed production, employment, and prices in many countries, including the United States. In addition, the sight of the world’s largest economy resorting to punitive tariffs confirmed to everybody that the liberal trading system that had been created during the late nineteenth century was truly done for. For a long time, Great Britain had provided the leadership the system needed to survive, but by 1930 it was no longer strong enough to fulfill this role. The United States had the capacity to lead, but it lacked the willingness. And so the passage of the Smoot-Hawley Act was a historic turning point, as Charles Kindleberger, the late M.I.T. economic historian, wrote, “because it made clear that in the world economy no one was in charge.” This further undermined confidence and deepened the slump.

Of course, any parallels between 1930 and 2018 should be drawn cautiously. For a number of reasons, the current situation is very different to the one that faced President Herbert Hoover, who signed the Smoot-Hawley Act despite a written appeal signed by more than a thousand economists.

For one thing, the tariffs that Donald Trump trumpeted in a signing ceremony at the White House on Thursday afternoon are much narrower than the ones contained in the Smoot-Hawley Act. At least for now, they are confined to two industries—steel and aluminum. According to Chad P. Brown, of the Petersen Institute for International Economics, they would affect about forty-six billion dollars’ worth of U.S. imports, which was only about two per cent of last year’s total. So far, financial markets have reacted pretty calmly to the prospect of tariffs, indicating that investors don’t expect them to lead to a broader trade war.

Another important difference is that, in 1930, the world economy was already in deep trouble, and some countries had already resorted to protectionism. Today the U.S. economy is growing at a rapid clip, and so is the global economy. Outside of the United States, at least, the aversion to protectionism remains strong, and Trump is seen as an outlier.

Third, the global trading system is more firmly rooted today than it was in 1930. That's because after the Second World War, dozens of countries, with the United States taking the lead, created a series of trade rules and institutions that were expressly designed to prevent a repeat of the nineteen-thirties. In addition to numerous free-trade treaties between countries, there is now an official body, the World Trade Organization, which is tasked with policing the over-all system and punishing cheaters. It’s far from perfect, but it does provide a venue for resolving disputes.

Trump, however, is ignoring the W.T.O., which he dismisses as biased against the United States. That’s one reason it is important not to discount history, or the possibility of further repercussions. The rest of the world could interpret Trump’s tariffs as a signal that the United States is retreating from leadership on trade, and, indeed, retreating from a basic commitment to play by the rules that previous U.S. Administrations did so much to create. In the long term, as The Economist points out in its latest issue, such a perception could prompt other countries to react in kind, thereby undermining the entire system, much as the Smoot-Hawley Act did in the thirties.

On Thursday morning, hours before Trump announced the tariffs, Mario Draghi, the president of the European Central Bank and Europe’s top economic policymaker, was asked what impact the U.S. action would have on the global economy. Draghi, an Italian who obtained a Ph.D. in economics from M.I.T., said that the immediate impact wouldn’t be large. “But what strikes me,” he went on, “is that, whatever convictions one has about trade . . . we are convinced that disputes should be discussed and resolved in a multilateral framework, that unilateral decisions are dangerous.” That was a clear slap at Trump for undermining the W.T.O. “And also, there is a certain worry, or concern, about the state of international relations,” Draghi continued. “Because if you put tariffs against what are your allies, one wonders who the enemies are.”

Trump’s stated targets are countries such as China and South Korea that allegedly flood the U.S. market with metal goods sold at artificially low prices. Even many pro-free-trade economists agree with the White House that this is a real problem. But, as I wrote the other day, China accounts for less than ten per cent of all steel imports, which places it behind Canada, Mexico, and the European Union. These countries could be among the biggest victims of Trump’s tariffs.

In his remarks on Thursday, the President indicated that Canada and Mexico would be exempted from the tariffs, but only if they reach an agreement with the U.S. on reforming NAFTA—an outcome that is far from guaranteed. Trump didn’t dwell on the E.U., but he seemed to be referring to European countries when he said, “Many of the countries who treat us worst on trade are our allies.”

In typical Trump fashion, other details of the tariffs also remain unclear. Indeed, the piece of paper that he signed wasn’t a proper executive order: it was merely a Presidential proclamation—a statement of intent. But from the manner in which Trump spoke it seemed clear that, in his mind, at least, this marked a fundamental change in U.S. trade policy, and not merely a targeted anti-dumping measure.

The lesson of history is that in trade, as in other areas, one thing leads to another, and then another. On Wednesday, the E.U. threatened to impose duties on bourbon, peanut butter, cranberries, and orange juice produced in the United States. Brazil and China have also said they are considering retaliatory measures. Sadly, that could just be the beginning.