Trade Wars Coming?
“High tariffs and currency wars cost us big in the 1930s. We can avoid making the same mistakes again.” The Wall Street Journal on the history of the tariff.
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“The tariff was originally proposed to help American farmers, who experienced a long downturn after enjoying high prices during the boom years of World War I. Low farm prices led to severe financial distress and mortgage defaults. Congress’s first reaction was to pass agricultural price supports to boost farm income, but President Calvin Coolidge twice vetoed this legislation. In order to appear as if it were doing something to help farmers, Congress opted for higher import duties. The problem was that most farmers, particularly of wheat and cotton, exported their crops, and the world market determined the prices that they received. Higher tariffs on the trivial amount of imports they faced did nothing for them.”
