Will history repeat badly on tariffs? With the stock markets giving a big thumbs down following President Trump’s announcement of reciprocal tariffs, it is time...

Will history repeat badly on tariffs?

With the stock markets giving a big thumbs down following President Trump’s announcement of reciprocal tariffs, it is time to give a refresher course in American history.

You don’t have to be an economist to see that the trade policy will result in weaken growth and higher prices.

You don’t have to be a bettor to see that the tariffs are a high stakes gamble with the finances of the average American. Tell that to those in the administration who dismiss the cratering in stocks as short term pain for long term gain

You don’t have to be an historian to see that raising tariffs in such an abrupt manner has not worked in the past

Will history repeat Badly on tariffs?

But don’t take my word for it.  Read what the U.S. Senate has on its website.

…it was on June 13, 1930, that the Senate passed the Smoot-Hawley Tariff, among the most catastrophic acts in congressional history…

…A thousand economists signed a petition, drafted by a Chicago economist, and future U.S. senator, Paul Douglas, that implored the president to veto the tariff… Hoover signed the tariff on June 17, 1930.

As the economists predicted, the high tariff proved to be a disaster. Even before its enactment, U.S. trading partners began retaliating by raising their tariff rates, which froze international trade…

 ,,,Most of the progressive Republican senators who had campaigned for Hoover in 1928 wound up endorsing Franklin D. Roosevelt for president in the next election. Nor did the tariff sit well with the voters. In 1932 they turned the majority in both houses over to the Democrats, by large margins. The voters also made clear their disdain for the Smoot-Hawley tariff by booting both Reed Smoot and Willis Hawley out of office that year.

Will history repeat badly on tariffs?

How to define disaster?

Disaster is a story like this one I heard on the radio. A bicycle store owner is waiting for a shipment of bikes for the upcoming season manufactured in Taiwan. The shipment now faces a tariff of 47% on  goods imported from Taiwan that the store owner cannot afford to pay. Even if he could afford it, the cost would be passed on to the buyer.

This is just one story that will be repeated across most inductries.

Will history repeat? Are the risks worth it? If you were betting with your own money then do as you please. Since you are gambling with our finances, maybe you should reconsider and make a course correction.

Will history repeat badly on tariffs?

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Will history repeat badly on tariffs?