That's what Paul Krugman is arguing about re Trump's moving us toward trade wars. He "is returning America to the kind of irresponsibility it displayed after World War I." As indicated by refusing to join the League of Nations, slamming the doors shut on most immigration, doubling average tariffs on dutiable imports (via Smoot Hawley Act, Emergency Tariff Act, Fordney-McCumber Tariff). Like now,farmers were especially hard hit - low prices for their products and high prices for farm equipment, leading to a surge in foreclosures.
Our tariffs put our World War I allies in an impossible position: We expected them to repay their huge war debts, but our tariffs made it impossible for them to earn the dollars they needed to make those payments.
The combination of trade war and debt nexus created a climate of international distrust and bitterness that contributed to the economic and political crises of the 1930s. But we learned something about a post-war world. After World War II we operated on the basis that free trade and peace went hand in hand.
No comments:
Post a Comment