Remembering Smoot Hawley as a recession hits

https://finance.yahoo.com/news/biden-faces-increasing-calls-…

The decisions are before our government. This is not just the admin. The Senate leaders have a larger input on this.

Smoot Hawley made the Great Depression a lot worse.

Relieving the tariffs would stabilize the global economy a terrific amount. At this point the Chinese should be more reasonable.

I suspect articles like this are trial balloons to ready the American public for negotiated outcomes.

The primary difference between now and 100 years ago, was that the US had protectionist trade policies through the 1920s. Almost everything sold here was made here. The tariff act of 1930 only increased what were already large barriers to trade.

Congress passed the temporary Emergency Tariff Act in 1921, followed a year later by the Fordney-McCumber Tariff Act of 1922. The Fordney-McCumber Tariff Act raised tariffs above the level set in 1913; it also authorized the president to raise or lower a given tariff rate by 50% in order to even out foreign and domestic production costs. One unintended consequence of the Fordney-McCumber tariff was that it made it more difficult for European nations to export to the United States and so earn dollars to service their war debts.

https://history.state.gov/milestones/1921-1936/protectionism…

That linkage between US trade policy in the 20s and the war debts is significant. The UK, alone, owed the US $4B, plus accrued interest. The UK wanted to pay for it in goods, but US industry did not want any part of a plan that would flood the US with British manufactured goods.

Now, most of the goods sold at retail are imported. We already have punitive tariffs on Chinese goods and a protectionist tariff on Korean washers. Additional protectionist tariffs would only increase prices, as there are often no US sources for equal goods.

Steve

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Steve,

All of the nations have heavy debt loads again, especially including China.

The British still exported plenty of product to the US. The tariffs did not stop that.

The tariffs were not a problem…until the great depression hit. We needed global trade to make it work. That is why the Marshall Plan was put into place after the war. That is why later Nixon went to China to stabilize future Chinese prospects which under solely communists rule of the day would have been only militaristic towards us.

https://youtu.be/uhiCFdWeQfA

I couldn’t resist.

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And while we are at it, lets remember this disinterested, un-newed group, is gaining increasing voting power. Can our democracy survive all this uninformed participation?

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All of the nations have heavy debt loads again, especially including China.

And no-one is on the gold standard now either.

Steve

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