Make Me Smart

What we can learn from a past tariff tiff

Feb 12, 2025
Inu Manak, a trade policy expert at the Council on Foreign Relations, explores the lessons from the historic Smoot-Hawley Tariff Act. He discusses the potential ramifications of modern tariffs under Trump's leadership and how protectionist policies could hurt the U.S. economy. Manak warns that these measures may give rise to a self-fulfilling prophecy regarding U.S.-China relations. The conversation also lightens up with surprising ties to the film "Ferris Bueller's Day Off" and local meat sourcing!
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ANECDOTE

Smoot-Hawley Tariff Act

  • The Smoot-Hawley Tariff Act of 1930 attempted to alleviate the Great Depression by raising tariffs.
  • This act is widely believed to have worsened the Depression.
INSIGHT

Smoot-Hawley's Relevance

  • Smoot-Hawley is a historical example of protectionist trade policies.
  • It significantly reduced U.S. trade and worsened the Great Depression, leading Congress to delegate tariff authority to the president.
INSIGHT

Presidential Tariff Authority

  • Historically, Congress set tariffs, but now the president has significant authority.
  • This authority includes imposing tariffs for various reasons, such as national security.
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