The grim portrait of a former House Ways and Means Committee chairman, Willis C. Hawley, glares down on House and Senate conferees, reminding them of the risks they face as they try to craft a sweeping revision of trade legislation in the midst of a global financial upheaval.

Hawley, an Oregon Republican, was the cosponsor with Sen. Reed Smoot of the 1930 bill that increased U.S. tariffs and is widely blamed for helping to trigger the Great Depression. As important to the politicians on Capitol Hill, both Smoot and Hawley, who each served more than 20 years in Congress, were defeated in the 1932 election.

With their eye on that grim history, Congress is treading cautiously with the trade bill, concerned especially about the reactions in stock markets of Hong Kong and Tokyo, where any trade bill that Congress would pass is likely to be considered protectionist.

"I certainly think we should all be a little more circumspect about what we say and do," said Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.).

"Our primary goal for now must be to restore investor confidence, and one of the big questions is whether the United States is willing to reassert world economic leadership. By passing trade legislation designed to spur world trade, we give solid reassurance of our readiness to lead in an expansion of world trade. Failure to pass it means continued uncertainty on that critical question," Bentsen continued.

But Sen. Bob Packwood (R-Ore.), ranking Republican on the Finance Committee, said yesterday that "it's very unlikely" Congress will be able to pass a major trade bill this year because of the pressure of other legislation, including ongoing efforts to reduce the budget deficit that involve the same key lawmakers who are heading the trade conference.

And the White House indicated a slight shift in its position of working with Congress to craft a "constructive" bill that will expand, not curtail world trade. While refusing to endorse Labor Secretary William Brock's suggestion Wednesday that Congress drop the trade bill to avoid upsetting markets, a White House aide yesterday called it "an interesting idea."

But aides to Senate Majority Leader Robert C. Byrd (D-W.Va.) said Congress will pass the trade bill this year, and suggested that any good will developed in the budget summit between the administration and Congress can be carried over to the trade bill. The aide, acknowledging that "everybody is highly sensitive to the markets," said the Democratic leadership of Congress is developing "a rather detailed rationale" of the bill so it can better defend it provision by provision to show that it is not protectionist.

Rep. Richard A. Gephardt (D-Mo.), a Democratic presidential contender, plans a series of speeches next week defending his controversial proposal that would force U.S. trade retaliation against countries that gain "excessive" trade surpluses through unfair tactics. He called it a "a positive approach" to world trade problems and pictured himself as being in touch with the realities of national and international economic conditions.

But a number of the trade conferees said Gephardt's amendment is likely to be changed to the point where it might not be recognizable in the final bill.

Another provision that is likely to be killed is being sponsored by Rep. John Bryant (D-Tex.) that would place registration requirements on foreign investors. The Reagan administration said this would discourage the foreign investment that the U.S. needs to finance its budget deficit.

"Congress wants to send a message to the markets that it can act responsibly," said William T. Archey, international vice president of the U.S. Chamber of Commerce. "I never thought the bill was protectionist anyway," he added, but it has been characterized as "son of Smoot-Hawley, which is unfair to Congress."