Amid the ongoing tariff war sparked by US President Donald Trump's reciprocal tariffs, China has shared a 1987 video of former US President Ronald Reagan. In the video, Reagan discusses the pitfalls of tariffs on imports. A post from the Chinese Embassy in the US states that Reagan's 1987 speech holds new relevance in 2025.
Reagan’s 1987 Critique of Tariffs
In the clip, Reagan says, “You see, at first, when someone says, ‘let’s impose tariffs on foreign imports,’ it looks like they’re doing the patriotic thing… And sometimes, for a short while, it works—but only for a short time.” The post has come after the Trump administration introduced fresh tariffs on Chinese goods.
Impact On Home-Grown Companies
He further said, “What eventually occurs is that home-grown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets.”
The Retaliation Concerns
Warning of the repercussions, Reagan added, “High tariffs inevitably lead to retaliation by foreign countries, and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers, and less and less competition. So soon, because of the prices made artificially high by tariffs that subsidise inefficiency and poor management, people stop buying."
“Markets Shrink, Collapse”
Reagan concluded the speech by saying, “Then the worst happens. Markets shrink and collapse, businesses and industry shut down, and millions of people lose their jobs. The memory of all this occurring back in the ’30s made me determined… to spare the American people the protectionist legislation that destroys prosperity.”
The Relevance Of Reagan
China has shared this video of the former US President at a time when the current US President Donald Trump has triggered a tariff tussle with his reciprocal – or tit-for-tat – tariff regime. Under the new regime, the Trump administration has imposed high tariffs against around sixty countries, with China being the worst hit.
