It was Aug. 15, 1971, and then-President Richard Nixon delivered an address to the nation to lay out a new economic approach for a country beset by economic worries and challenges to the US dollar.

A key prong of his plan was an "import surcharge" — in effect a new tariff — of 10% across America's trading relationships to prop up US business in the face of what Nixon called unfair exchange rates.

"This import tax is a temporary action, it isn't directed against any other country," Nixon said. "When the unfair treatment is ended, the import tax will end as well."

The measure was implemented by executive order but was gone by the end of that year. The episode is instructive as former President Donald Trump campaigns around a strikingly similar idea for "universal baseline tariffs" of 10% that would apply to most foreign products coming into the US.

"I love China, I love everybody, but they can't take advantage of us," Trump said at a recent rally in New Hampshire.

The episode is also illustrative of the ties between Trump and Nixon that include a political allegiance that spans their decades of separation on the political stage. The two men socialized at least once and often wrote to each other near the end of Nixon’s life.

As Todd Tucker of the Roosevelt Institute once noted on X: "Love it or hate it, like many Trump ideas, the idea of a 10 percent import surcharge comes from things Nixon actually did."

The import surcharge as a 'negotiating tactic'

The other planks of Nixon's 1971 plan — new limits on the exchange of dollars for gold and a 90-day freeze on wages and prices — became landmarks in financial history.

Nixon's moves on currency eventually ushered in a new era of floating exchange rates and an end of the so-called Bretton Woods international monetary system that had been in place since World War II.

Today, the import surcharge may be less remembered largely because it wasn’t around long enough to have a sizable economic impact. It was also gone after being "bitterly opposed by the United States' trading partners," as the New York Times noted at the time.

But it appears to have served an important role as a negotiating tactic.

Japan was a focus for Nixon at the time as his administration was trying to pressure the nation to negotiate a revaluation of the yen. Germany was also a priority, says Richard Baldwin of the IMD Business School.

"The US was mad at the Germans for keeping the value of the Deutschmark low," he explained in a recent interview.

Nixon's import surcharge forced both the Germans and Japanese to take another look at their currencies. The import surcharge ended in December 1971 as part of the so-called Smithsonian Agreement among G-10 nations that included significant initial currency wins for the Nixon administration.

But Baldwin warns that there may be fewer off-ramps when it comes to Trump’s approach to a 10% tariff this time around, especially with his keen focus on China.

"There's nothing that the Chinese could do that would make us happy with them," he says, noting that the current rivalry is essentially about the financial structures of two superpowers and the question of who will be the world’s economic engine over the coming decades.

Trump is also eyeing much more aggressive measures aimed at China beyond anything on the table for Nixon. The current GOP hopeful has publicly discussed an effort to rapidly decouple with China beginning in 2025 and "phase out all Chinese imports of essential goods." On Saturday, the Washington Post also reported that Trump is privately discussing the possibility of imposing a flat 60% tariff on all Chinese imports.

China has "gained competitiveness and that's what people like Trump are all upset about and there's no cure to that," Baldwin notes.

As he crisscrosses the country for his current run, Trump often promises he can "get things solved" with China but offers little detail on what that would look like and how long a tariff, which could extract significant economic consequences if left in place for an extended period, might be needed.

Instead the candidate whose historic wins this month in Iowa and New Hampshire appear to put him on the path to a third consecutive GOP nomination talks about his tariffs as ones that could be in place for the long term.

He has likened them to "a ring around the collar" of the US, adding a claim that they would be a bonanza for the US Treasury as businesses are hit with the new duties. The Tax Foundation recently pegged the proceeds of the 10% tariffs at $300 billion a year.

A populist tactic

The 1971 episode with Nixon is also evidence of the power of the idea of a tariff to sway public opinion.

Future Federal Reserve Chair Paul Volcker — who in 1971 was the Treasury undersecretary for monetary affairs — later recalled that the surcharge was thought of as two pronged: "both an essential negotiating tactic and a way to attract public support."

The import surcharge push from Nixon was also seen as a way to head off more protectionist impulses that were percolating at the time on Capitol Hill.

Tucker of the Roosevelt Institute also noted the importance of the surcharge as a PR tool, writing in a 2009 book with Lori Wallach that the surcharge did almost nothing to change the US trading balance. "However," he wrote, "the underlying political goal had been accomplished: Nixon had established his populist credentials" and boosted his poll numbers.

This time around, Trump is the one pushing the conversation in a more protectionist direction over many in his own party who might be wary of another round of global tensions.

Trump often touts his tariff plan as evidence of how he is the candidate looking to protect Americans even as economic studies of the trade wars he undertook during his term in office suggest mixed results. His tariffs did indeed protect some US jobs but at the cost of higher prices for everyone, according to some of the results.

Nevertheless, as Trump declared at a recent rally, "We will impose stiff penalties."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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