Latest news with #ReedSmoot
Yahoo
15-04-2025
- Business
- Yahoo
Tariffs and trade wars: here's what Trump is failing to learn from the Great Depression
Imagine waking up in 1932, in any US city. Upon ordering your morning coffee, you realise that its price has doubled since last year. This isn't because of a coffee shortage, but rather because new trade barriers have caused the price of importing Colombian coffee beans to shoot up. The same thing has happened to sugar, tea and cocoa. Everyday items have suddenly become a luxury. This dramatic change stemmed from one of the most harmful decisions in modern economic history: the Smoot-Hawley Act, enacted in June 1930. This law, championed by senator Reed Smoot and congressman Willis C. Hawley, aimed to safeguard US agricultural interests in the wake of the 1929 stock market crash. However, pressure from industry lobbies meant it quickly expanded to cover over 20,000 products, including manufactured goods. Tariffs averaged around 40%, but in some cases were as high as 100%. Far from helping the economy, this measure contributed to the collapse of international trade, as countries like Canada, France, Italy, Germany and the UK imposed harsh retaliatory tariffs on on US products. This set off a chain reaction: international cooperation weakened, US exports fell by 61% between 1929 and 1933, and global trade shrunk by over 60%. This further aggravated the Great Depression. It hit economies who depended on international trade especially hard, and exacerbated geopolitical tensions throughout the 1930s. Skyrocketing inflation, mass job destruction and falling living standards became stark testaments to protectionism's failure. The contraction of global trade not only crippled key industries, but also destabilised entire economies that depended on exports to sustain growth. Currencies were devalued, deficits soared, and financial systems collapsed one after the other. The 1930s therefore witnessed not only an economic crisis, but also a transformation of the international system fuelled, in part, by misguided political and trade decisions. This historical lesson, as the current case of Trump's tariffs demonstrates, continues to be ignored by leaders who prioritise short-term populist measures over global economic stability. Leer más: After decades of progress in trade liberalisation – driven by multilateral organisations like the World Trade Organization, the United Nations and the OECD – it seemed that lessons had been learned. However, Donald Trump's second presidential term has revived disturbing parallels with Smoot-Hawley. Historical and contemporary evidence clearly shows that tariffs rarely function as an effective tool of economic protection. In an interdependent global system, supply chains cross multiple borders before reaching the final consumer. Higher tariffs raise production costs, hurting both consumers and businesses, even in the countries that implement them. In addition to the US, other countries have also felt the adverse effects of protectionism. Argentina, for instance, implemented an import substitution policy with high tariffs and trade restrictions for decades. Although it initially stimulated industrial development, in the long run it led to a loss of competitiveness, high inflation and dependence on the state to prop up inefficient sectors. Brazil had a similar experience in the 1980s and 1990s. Its tariff barriers temporarily protected certain industries, but also reduced product quality and stifled technological innovation. Until its 1991 economic reforms, India had one of the world's most protectionist tariff regimes, which limited its integration into global trade and slowed its economic growth. From these examples we can see that protectionism often causes a chain reaction of negative, escalating impacts: Rising prices for consumers Loss of economic competitiveness and job destruction Reduction of global economic growth due to uncertainty and diminished international trade. From the Smoot-Hawley Act to Trump's current trade war, economic history clearly demonstrates that protectionism is not only ineffective, but counterproductive. In a world where value chains are global and innovation depends on transnational cooperation, closing economic borders weakens collective resilience. Protectionism may seem like an immediate solution to economic crises and domestic pressures, but its long-term consequences are almost always more costly than its apparent benefits. Instead of strengthening domestic industries, it isolates them. Instead of protecting jobs, it destroys future opportunities. The aforementioned cup of coffee in 1932 became a symbol of an economy locked in on itself. In 2025, it could be electric car batteries, medicines or basic foodstuffs that remind us of the high cost of negatively interfering in global trade. Now more than ever before, international cooperation, market diversification and investment in sustainable competitiveness are the only smart way forward. Este artículo fue publicado originalmente en The Conversation, un sitio de noticias sin fines de lucro dedicado a compartir ideas de expertos académicos. Lee mas: Trump protectionism and tariffs: a threat to globalisation, or to democracy itself? U.S. tariffs are about to trigger the greatest trade diversion the world has ever seen Trump's tariffs rollercoaster is really about Republican unity Deniz Torcu no recibe salario, ni ejerce labores de consultoría, ni posee acciones, ni recibe financiación de ninguna compañía u organización que pueda obtener beneficio de este artículo, y ha declarado carecer de vínculos relevantes más allá del cargo académico citado.
Miami Herald
14-04-2025
- Business
- Miami Herald
A Florida sales tax cut would bring unpleasant service cuts
Makes no sense Last Wednesday, the Florida House unanimously passed legislation to permanently reduce the state's general sales tax rate from 6% to 5.25%. The measure also includes corresponding 0.75 percentage point reductions for several other taxes, including those on commercial rents, electricity, mobile home sales and amusement machines. If signed into law, the rate changes will take effect on July 1 and are projected to reduce state general revenue by $4.89 billion annually and local government revenue by more than $500 million. Sure, we all want to pay fewer taxes, but how do we run our state and municipal governments, pay for infrastructure improvements, police, fire, air and water quality efforts, education (now that the U.S. Department of Education has been gutted) and many other services that citizens expect government to furnish, when we are sucking air on providing these services today, before a tax cut? Florida is already nearing the red ink over storm coverage, to the extent that Citizens Insurance Florida can barely cover existing losses, while private carriers are threatening to bail on Florida — again. George Lipp, Cooper City Depressing thought Anyone who has studied economics at the college level knows what a tariff is along with its negative effects. In 1930, Republican Sen. Reed Smoot and Republican Rep. Willis C. Hawley, backed by a Republican congress, passed the now infamous Smoot-Hawley Tariff Act, which raised tariffs on more than 20,000 imported goods. The act spurred retaliatory actions by many nations and was a major factor in reducing imports to the U.S. during the Great Depression. Economists and economic historians alike agreed unanimously that the passage of this act worsened the effects of the Great Depression, hurting every sector of the U.S. population. Against the backdrop of this history lesson, President Donald J. Trump has unleashed an economic monster set to destroy economies and relationships across the globe — all at the expense of Americans and people of other nations who will surely feel the pain. Edward Blanco, Cutler Bay Deportation details News articles about the recent deportation of people from the U.S. to prisons in El Salvador referred to an agreement between both countries to accept the deportees. What kind of agreement is that? Is the U.S. paying the CECOT (Terrorism Confinement Center) prison to keep these people? Is El Salvador paying the U.S. to send them inmates as possible laborers? Does the prison have a roster of who they are holding for the U.S.? We need this information to make sense of our Executive Branch's claim that it can't bring back a specific prisoner. Heidi Markovitz, Washington, D.C. Harmful hunches President Trump's reliance on gut instinct, not evidence-based logic, when navigating the complexities and challenges of his presidency, is a stark reminder of how his dependence on intuition resulted in controversy during his first term. With little or no conscious reasoning for the recent sweeping tariff impositions, which his administration falsely claimed were a tax cut for Americans, Trump is betting heavily on a hunch once again. His belief that he understands economics better than seasoned economists is being met with near universal censure and is destabilizing our financial markets. Effective governance requires balancing intelligence with pragmatism. When either becomes subordinate to instinct, chaos rules the day. The president would be wise to understand this. Jane Larkin, Tampa Bring these to life Re: the Miami Herald April 8 online article, ''De-extinction' startup with $10 billion valuation revives dire wolf.' Colossal Biosciences has made a monumental scientific breakthrough by resurrecting the dire wolf from extinction through DNA and bio-engineering. Dire wolves once roamed Florida more than 12,000 years ago, evidenced by bones discovered in the 1990s at the Cutler Fossil Site near Biscayne Bay in Miami-Dade County. Also discovered at that archaeological site were extinct American lions, saber-tooth cats, American mastodons, long-horned bison and more. Instead of resurrecting the dire wolf, seemingly better choices would have been the Caribbean monk seal, Carolina parakeet, or the passenger pigeon. Roger Hammer, Homestead Police reform The tragic death of U.S. Air Force Senior Airman Roger Fortson in May 2024 showcases the urgent need for comprehensive police reform in Florida. Fortson, a 23-year-old Black serviceman, was fatally shot in his own home by an Okaloosa County sheriff's deputy responding to a disturbance call. According to reports, Fortson was alone at the time, raising critical questions about the circumstances that led to this fatal encounter. This incident is not isolated. A study by Florida Atlantic University revealed significant 'hotspots' of police misconduct across the state, highlighting systemic issues that disproportionately affect communities of color. As a Black social work student committed to social justice, I find these patterns deeply troubling. The dying of trust between law enforcement and the communities they serve compromises public safety and well-being. Florida must implement statewide reforms to address this crisis, including independent civilian oversight boards, mandated de-escalation training and stringent use-of-force policies. Policymakers, law enforcement leaders and community members must prioritize these reforms. The cost of inaction is measured in lives lost and communities fractured. We must act now to build a system that truly protects. Jonathan Sanon, Miami Awkward MAGA I remember a time in American when playing the victim was not a good look. However, in the MAGA world, being a victim is good. According to MAGA, America has been victimized by the entire world: victimized by teachers, by doctors, by Muslims, by Black and brown people, victimized by gays. When life has not gone your way, it's not your fault, you are a victim. You lost your job; not your fault, you're a victim. You have no education; it's not your fault, you're a victim. You have no money; it's not your fault, you're a victim. America is not a victim. Real Americans make their own destiny. They don't allow another group of people determine their lives and their destinies. Real Americans don't play the victim. Real Americans don't blame someone else for their problems. America is, by far, the wealthiest country in the world. We have, by far, the strongest military in the world. It is absolutely ridiculous that we play the victim and MAGA thinks that's okay. Reject calling yourself a victim; it's embarrassing, quite frankly. Don Whisman, Stuart Net worthless? 'No Country for Old Men' was the title of a 2007 neo-Western crime thriller film. Today, it could easily be moniker for the United States under the second Donald Trump administration. Trump is the worse president since Herbert Hoover. Just ask any old man who has seen his financial portfolio disappear before their very eyes in recent days. Barry Levy, Miami Malnourished minds Humans today are not as psychologically fit as we were generations ago. The present deluge of information represents an excess of calories which is fueling an epidemic of political obesity. We are being force fed a diet of information designed to trigger our strongest emotional and physical responses. In a word, we are 'infobese.' We must stop ingesting these excess political calories maintain a political diet that will keep us in the best physical and mental condition to achieve political longevity without infobesity! Bill Silver, Coral Gables Severe condition President Trump justifies his tariffs by claiming that we are in a 'national emergency.' I agree with him, not on what the emergency is, but rather, who it is! Marcia Braun, Miami Spring
Washington Post
08-04-2025
- Business
- Washington Post
Trump says high tariffs may have prevented the Great Depression. History says different
WASHINGTON — In the early days of the Great Depression, Rep. Willis Hawley, a Republican from Oregon, and Utah Republican Sen. Reed Smoot thought they had landed on a way to protect American farmers and manufacturers from foreign competition: tariffs. President Herbert Hoover signed the Smoot-Hawley Tariff Act in 1930, even as many economists warned that the levies would prompt retaliatory tariffs from other countries, which is precisely what happened. The U.S. economy plunged deeper into a devastating financial crisis that it would not pull out of until World War II.
Yahoo
02-04-2025
- Business
- Yahoo
Opinion - Why exactly is Trump so obsessed with tariffs?
They're calling it 'Liberation Day.' But unless your idea of freedom involves paying more for everything from cars to cocktails, you might want to hold the champagne. Because today, President Trump is celebrating his latest economic brainchild: new tariffs on most imported goods. Now, I know Trump's not big on reading, or history, or, you know, 'thinking.' But this isn't some innovative new radical idea he just cooked up at Mar-a-Lago. No, serious people (see Sen. Reed Smoot and Rep. Willis C. Hawley in 1930) have tried this before. And guess what? It doesn't work. It's the economic equivalent of trying to cure a headache with a hammer. The sainted Ronald Reagan warned against this strategy. And Trump himself acknowledges it might cause a 'disturbance' and says he 'couldn't care less' if car prices increase. Which, on one hand, is refreshingly honest. On the other hand, it's a little unsettling to hear this from a guy whose 2024 campaign sales pitch hinged on lowering prices. So why is he doing this? Well, let's start with the kindest explanation — one that assumes he is neither scheming nor lying, just genuinely misguided and mistaken. Maybe, just maybe, Trump truly believes tariffs are an unmitigated good. He's certainly been talking about them for decades, in that way certain old men get fixated on ideas that were debunked long before they were born. He sees the world as a rigged, zero-sum game, where America (and more importantly, Trump) is always getting fleeced. The only solution is to hit back — hard, indiscriminately and preferably with something that fits on a bumper sticker. If you buy into Trump's victimhood logic — and you shouldn't — then maybe you believe there will be some initial suffering, some 'pain' before the 'gain,' as one of his minions put it. And then what? Factories magically reappear in Ohio? American manufacturing rises from the dead like some sort of blue-collar phoenix? American kids can suddenly climb the rope in gym class and perform five pull ups? Never mind that companies spent decades building a global supply chain because it was cheaper and more efficient (see David Ricardo's law of comparative advantage, circa 1817). Never mind that even if you could unwind that elaborate system, it would take decades — longer than Trump will be alive, and certainly longer than he plans to pay attention. And in the meantime, American consumers, who are already gasping from inflation, get smacked with higher prices. Now, if Trump actually cared about national security — and that's a big 'if' — there might be a plausible argument to be made here. Maybe the idea is to make America less dependent on foreign supply chains, especially from countries like China (and not, say, Canada). Remember when we couldn't get enough masks during COVID? That was fun. But if that's the goal, wouldn't a competent leader go on TV, look the country in the eye and say, 'Listen, folks. This is going to hurt in the short term, but here's why your sacrifice matters'? Instead, all we get are vague platitudes, the usual 'tough talk,' and press flacks and right-wing talking heads constantly assuring us that 'the president has been very clear.' Spoiler: He hasn't. He never is. His entire communication strategy is to blurt out something inflammatory and let everyone else scramble to impose meaning on it (which he will then contradict). Which brings us to the less-generous interpretations. Maybe this isn't about fixing the economy at all. Maybe it's about power: the raw, transactional, kingmaker kind. The ability to impose tariffs at will lets Trump dictate winners and losers, punish or reward entire industries and nations, shake down CEOs and generally feel like the most important man in the room. Or maybe it's about money. Not for you, of course. For the billionaires. The ones who see economic crises as buying opportunities. The ones who made a killing off the 2008 crash and the COVID crisis. When everything is burning, they swoop in and pick through the wreckage for bargains. And wouldn't it be extremely convenient to know exactly when that wreckage was coming? So here we are. The best-case scenario is that Trump is utterly misguided. The worst-case scenario is that it's all a con job. And the most likely scenario? Some combination of the two. Either way, the result is the same: You pay more, he gets more power and nothing actually gets better. In other words, just another day in the Trump administration. Matt K. Lewis is a columnist, podcaster and author of the books 'Too Dumb to Fail' and 'Filthy Rich Politicians.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
02-04-2025
- Business
- The Hill
Why exactly is Trump so obsessed with tariffs?
They're calling it 'Liberation Day.' But unless your idea of freedom involves paying more for everything from cars to cocktails, you might want to hold the champagne. Because today, President Trump is celebrating his latest economic brainchild: new tariffs on most imported goods. Now, I know Trump's not big on reading, or history, or, you know, 'thinking.' But this isn't some innovative new radical idea he just cooked up at Mar-a-Lago. No, serious people (see Sen. Reed Smoot an d Rep. Willis C. Hawley in 1930) have tried this before. And guess what? It doesn't work. It's the economic equivalent of trying to cure a headache with a hammer. The sainted Ronald Reagan warned against this strategy. And Trump himself acknowledges it might cause a 'disturbance' and says he ' couldn't care less ' if car prices increase. Which, on one hand, is refreshingly honest. On the other hand, it's a little unsettling to hear this from a guy whose 2024 campaign sales pitch hinged on lowering prices. So why is he doing this? Well, let's start with the kindest explanation — one that assumes he is neither scheming nor lying, just genuinely misguided and mistaken. Maybe, just maybe, Trump truly believes tariffs are an unmitigated good. He's certainly been talking about them for decades, in that way certain old men get fixated on ideas that were debunked long before they were born. He sees the world as a rigged, zero-sum game, where America (and more importantly, Trump) is always getting fleeced. The only solution is to hit back — hard, indiscriminately and preferably with something that fits on a bumper sticker. If you buy into Trump's victimhood logic — and you shouldn't — then maybe you believe there will be some initial suffering, some 'pain' before the 'gain,' as one of his minions put it. And then what? Factories magically reappear in Ohio? American manufacturing rises from the dead like some sort of blue-collar phoenix? American kids can suddenly climb the rope in gym class and perform five pull ups? Never mind that companies spent decades building a global supply chain because it was cheaper and more efficient (see David Ricardo's law of comparative advantage, circa 1817). Never mind that even if you could unwind that elaborate system, it would take decades — longer than Trump will be alive, and certainly longer than he plans to pay attention. And in the meantime, American consumers, who are already gasping from inflation, get smacked with higher prices. Now, if Trump actually cared about national security — and that's a big 'if' — there might be a plausible argument to be made here. Maybe the idea is to make America less dependent on foreign supply chains, especially from countries like China (and not, say, Canada). Remember when we couldn't get enough masks during COVID? That was fun. But if that's the goal, wouldn't a competent leader go on TV, look the country in the eye and say, 'Listen, folks. This is going to hurt in the short term, but here's why your sacrifice matters'? Instead, all we get are vague platitudes, the usual 'tough talk,' and press flacks and right-wing talking heads constantly assuring us that 'the president has been very clear.' Spoiler: He hasn't. He never is. His entire communication strategy is to blurt out something inflammatory and let everyone else scramble to impose meaning on it (which he will then contradict). Which brings us to the less-generous interpretations. Maybe this isn't about fixing the economy at all. Maybe it's about power: the raw, transactional, kingmaker kind. The ability to impose tariffs at will lets Trump dictate winners and losers, punish or reward entire industries and nations, shake down CEOs and generally feel like the most important man in the room. Or maybe it's about money. Not for you, of course. For the billionaires. The ones who see economic crises as buying opportunities. The ones who made a killing off the 2008 crash and the COVID crisis. When everything is burning, they swoop in and pick through the wreckage for bargains. And wouldn't it be extremely convenient to know exactly when that wreckage was coming? So here we are. The best-case scenario is that Trump is utterly misguided. The worst-case scenario is that it's all a con job. And the most likely scenario? Some combination of the two. Either way, the result is the same: You pay more, he gets more power and nothing actually gets better. In other words, just another day in the Trump administration.
