Here we go again, to paraphrase Ronald Reagan.
Reagan, of course, was referring to his opponent’s rhetoric in the presidential contest, but in my context, we’re talking about the Smoot-Hawley Tariff Act of 1930 making a comeback in the Trump White House.
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If you recall, on April 2 — Trump’s self-proclaimed Independence Day when he announced massive tariffs — the stock markets went south, way south. They came back a week later when he announced a 90-day moratorium.
Guess what? That moratorium is now drawing to a close. Though Trump is evidently giving other countries till August 1 to make trade deals, he’s already announced huge new tariffs to take effect that day — 40 percent on Laos (site of many U.S. manufacturers), and 25 percent on Japan and South Korea, to mention a few.
Now the Smoot-Hawley tariffs were enacted to protect U.S. agriculture during the Great Depression, but the tariffs quickly spread to manufactured goods as well. Many attribute the length of the depression to these tariffs, but there were many factors at play.
Frankly, I would say the Volstead Act — Prohibition — probably played just as huge a part.
Anyway, Smoot and Hawley were members of Congress who drafted the bill. Long gone, their ghosts may now be stalking the White House fostering Trump’s tariff mania.
And yes, stocks sank again today as the moratorium neared its end.
What next, Mr. Trump, Prohibition Part II? You are a devoted teetotaler after all.
[PICTURED: A New York Times front page from 1930 showing more than a thousand economists warning against a tariff war.]