Economists Ask President, Congress To Drop Trade Protectionism

More than 1,100 economists, some Nobel Prize winners, have joined with the National Taxpayers Union to warn President Trump and Congress against continuing the present course of trade protectionism.  In an open letter to the president and Congress argue trade agreements work, while trade barriers, including tariffs and threats to rescind trade deals, don’t, citing the disastrous 1930 Smoot-Hawley Tariff Act.

President Trump argued during and since his campaign that deals like NAFTA are horrible, and that prior administrations have failed to deal with China.  But Trump’s confrontational approach, while paying some dividends as with South Korea, is making farmers and markets nervous about retaliation, especially by China.

“The first and most immediate impact of Smoot Hawley Tariffs, which were designed ostensibly to save jobs, the first thing that happened was unemployment went way, way up within a matter of weeks,” said former Department of Agriculture trade chief in the Clinton Administration Paul Drazek.

Drazek said there’s another, more recent example, of trade protectionism that backfired.

“The Russian grain embargo which Carter put in place, with a national security kind of justification, and of course it had an immediate effect, this is 1980, it had an effect on the mood of farmers, many of whom decided not to vote for Carter later that year and he lost the election.”

But, the jury’s still out for Trump on NAFTA and China, while the president has delayed until June 1^st, the steel tariffs on Canada, Mexico and the European Union.

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