The transatlantic trade war of 2025 bears an uncanny resemblance to the debt crises of the 1920s — and Donald Trump’s ‘refusal’ to negotiate with the EU as a bloc echoes Warren G. Harding’s punitive ‘America First’ playbook. Again.
By reviving Andrew Mellon’s (Harding’s Secretary of the Treasury) strategy of rejecting group deals and forcing bilateral negotiations, Trump isn’t just targeting European unity; he’s accelerating a return to an era where nation-states hold the real power, not supranational bodies like the European Commission.
In a way, history seems to be repeating itself — threatening the centralized authority of Brussels’ bureaucrats and the Commission, as Trump looks like he’d be giving back the power to the capitals and elected governments.
President Trump indeed has mentioned Harding’s name occasionally, but never referred to him as a role model.
This didn’t stop analysts from finding similarities between the two presidents, beyond their extramarital affairs.
Harding was the president who first used ‘America First’ as his main message. His campaign emphasized isolationism, economic nationalism (high tariffs to protect American industry), and ‘Return to normalcy’ (at that time, it meant the desire to move away from the chaos of war and reform movements — not over-pushing LGBTQ rights).
Oh, and one more parallel: ‘give Americans money back’.
Harding demanded that his allies repaid their WWI debts, because he found those financial arrangements unfair.
This slogan and ideology resonated with many Americans at the time, just as it did with many of Trump’s supporters a century later.
Andrew Mellon, Harding’s strong-handed, experienced Treasury Secretary was the main character in the implementation of those efforts against Europe (drowning under war debts).
His response was ruthlessly transactional.
First and foremost, he refused to negotiate with allies collectively. When Britain and France or a group of South and Eastern European states proposed a united front to restructure loans, Mellon dismissed it, insisting on country-by-country settlements.
Then, he tried to find different pressure tactics for each allied country — sometimes lower interest rates, sometimes longer repayment periods. But there weren’t any real favorites; neither was there room for special bilateral deals that favored one country over another.
Mellon worked hard to undermine multilateral institutions. He boycotted the League of Nations, dismissing it as a ‘European debating club’, his World War Foreign Debt Commission rather bypassed diplomatic channels to enforce fiscal discipline.
And, as a final leg, he applied a broad (non-selective) tariff policy. The Fordney–McCumber Tariff Act (1922) was a blanket increase on imports — not negotiated country by country. It protected U.S. industry in general, hurt exports from both big and small nations, and didn’t offer special exemptions.
The ‘result’?
European unity crumbled. France resented Britain’s softer terms, Italy defaulted, and the U.S. extracted meager repayments. But crucially, no centralized European body held sway — negotiations were strictly state-to-state.
The plan worked (seemingly): Europeans went down, and the U.S. started to rise.
At least in the short term.
In the short term, this policy boosted American industry, encouraged U.S. production and employment growth in protected sectors, and created a sense of economic nationalism that was useful for political reasons.
Mid- to long-term, the picture is slightly different.
Retaliatory tariffs (especially from Europe) hurt U.S. exports, slowed global trade, and set the stage for more extreme tariffs like the Smoot-Hawley Tariff of 1930, which many economists blame for worsening the Great Depression.
Looking at the way Trump started his trade war — not just against rivals but also against allied countries — we can find more similarities to what the Harding-Mellon duo implemented a hundred years ago.
Starting with ignoring Brussels.
Trump’s dislike of the EU is well documented. In his view, the EU was created against the U.S., and Commission President Ursula von der Leyen was not even worth a phone call once he returned to the White House. In fact, when Trump was asked if he would meet with von der Leyen, he simply said his team had had ‘numerous talks’ with ‘other countries’, without any mention of the Commission chief.
On the other hand, it is a lot more difficult to divide EU members in 2025, than it was a hundred years ago, thanks to the regulated single market.
Naturally, that doesn’t mean there aren’t differences between member states, hence differences in how they were affected by painful tariffs on key economic sectors.
Taking tools from Harding’s playbook, Trump also uses debt as leverage. Just as Harding tied debt relief to Europe’s adoption of U.S.-friendly tariffs, Trump has linked tariff rollbacks to EU states increasing defense spending on American arms.
And just like Mellon strong-armed France into accepting U.S. coal imports as partial debt payment; Trump now demands that the EU bought $350 billion worth of LNG to avoid tariffs on its car industry.
Harding’s rejection of the League of Nations finds its parallel in Trump’s sabotage of the United Nations, and his questioning of NATO and the WTO. Both presidents framed multilateral bodies as ‘enemies of sovereignty’ — a narrative that resonates with more and more European voters and leaders, especially given the EU Commission’s diminished legitimacy in recent times.
The Harding-Trump parallel reveals a grim reality for Brussels: centralized authority collapses when great powers refuse to recognize it.
Trump, pretty much like Harding, strongly believes not just in economic sovereignty but in political sovereignty, too. Trump prefers to deal with leaders who hold real power — those elected by voters, not chosen through backroom deals.
Facing the realities of the 21st century, and the European Union’s role as a single market, Trump has not hidden his interest in dealing with European states on a bilateral basis.
When he launched his tariff war a few weeks ago, he expressed that he is ready to negotiate with governments — in fact, he proudly boasted that governments are lining up with their offers.
After decades of an ever-growing Brussels bureaucracy and unelected leaders whose power sidelined national governments and elected parliaments, the president of the United States is now pushing back.
The world is only at the very beginning of this path, but Trump’s transactional nationalism might be accelerating a tectonic shift in European governance.
By forcing member states to act as independent actors, he is reviving a Europe of nations — one where the Commission’s role diminishes to advisory status.
For Brussels, the choice is stark: either cede ground to resurgent national governments or reinvent itself as a leaner, more flexible institution. Either way, the era of centralized EU authority might be nearing to its twilight.
