Economists Warn Trump Against 1930s Mistakes

A total of 1,140 economists, including 14 Nobel laureates, wrote to Donald Trump on Thursday in response to escalating trade friction between the United States and the European Union sent the letter. Trump has imposed tariffs on steel and aluminum imports, but has granted temporary exemptions only to the European Union and Australia, among others.In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act. The letter\’s authors cite this trade law, which many economists believe was one of the factors that triggered the Great Depression. Today, Americans face a host of new protectionist activities, including threats of withdrawal from trade agreements, misguided demands for new tariffs to address trade imbalances, and the imposition of duties on solar components, washing machines, and even steel and aluminum used by American manufacturers
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. 1930 Congress did not accept the advice of economists, and Americans across the country paid a heavy price. The economists and economics teachers who signed below urge you not to repeat this mistake. For example, trade is now significantly more important to the U.S. economy, but not so much the basic economic principles as they were described then. During his presidential campaign and since taking office, Trump has threatened to withdraw from decades of trade agreements, including the North American Free Trade Agreement (NAFTA). Trump has accused the pact of crippling the U.S. manufacturing base.
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The letter in question includes Nobel laureates such as Levon Ross, Richard Thaler, Oliver Hart, Roger Meyerson, and James Heckman; Jason Furman, former chairman of Barack Obama\’s economic advisory board; Ronald Reagan administration Brian Riley, director of the Taxpayers Free Trade Initiative and coordinator of the letter, said that Trump and former Democratic presidential candidate Bernie Sanders had argued against free trade before the election and that their rhetoric claims and said their rhetoric threatened the balance of the global economy.