The Impact of Trade Wars on the Economy

SOURCE www.history.com
President Donald Trump's belief that trade wars are good and easy to win has been disputed by many economists who point to the negative impact of the Smoot-Hawley Tariff Act in the 1930s. The act exacerbated the Great Depression by leading to retaliatory tariffs from other countries, causing a significant drop in global trade.

Key Points

  • The Smoot-Hawley Tariff Act exacerbated the Great Depression by leading to retaliatory tariffs from other countries
  • Negotiating trade deals with other countries to reduce tariffs promotes economic growth

Cons

  • Raising tariffs sharply can have negative effects on the economy
  • The Smoot-Hawley Tariff Act failed to protect U.S. industries from tariff increases
  • The act prolonged and possibly deepened the Great Depression