05.24.2019 0

Tariff alarmists got Trump trade stance wrong when they predicted another Great Depression

Did Smoot-Hawley alarmists get Trump tariffs wrong when they predicted another Great Depression?

In 2016, much of the conventional wisdom was that, if implemented, then-candidate Donald Trump’s tariffs would wreck the U.S. economy. It would have the same impact as the 1930 Smoot-Hawley Act, and so the prediction goes, lead to another Great Depression. Trump began levying tariffs on steel and aluminum in 2018, and in the second half of last year, hit China with a 25 percent tariff on $50 billion of high-tech goods and another 10 percent on $200 billion of goods and then raised it this month to 25 percent. Growth in 2018 came in at 2.9 percent, the best since 2015, and the first quarter of 2019 surprised at 3.2 percent. Unemployment is at a 49-year low at 3.6 percent. Inflation is stable at 2.0 percent the past 12 months. Are we anywhere near 1930?

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