The Rachman Review The end of globalisation as we know it
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Apr 10, 2025 Harold James, a Princeton University history professor and author of 'Seven Crashes,' delves into the ramifications of Donald Trump’s tariffs on global trade. He draws parallels to the Smoot-Hawley Tariff Act and discusses how protectionism could reshape U.S.-China relations. The conversation touches on the future of economic globalization, the risks to the U.S. dollar's reserve status, and the potential for financial crises. James also highlights the contrasting economic prospects in Europe, especially among Eastern European nations, amid these shifts.
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Smoot-Hawley's Real Impact
- Smoot-Hawley tariffs' negative economic impact was concentrated, severely affecting Japan's textile and Swiss watch industries.
- The global depression stemmed more from the 1931 financial crisis, prompting widespread protectionist measures to combat deflation.
Post-War Order & Trade
- Post-WWII global order prioritized open trade for peace and prosperity, recognizing their interdependence.
- Cordell Hull championed this view, shaping the 1944-45 world order based on shared prosperity and security.
Japan's Turn to Aggression
- Japan's aggression in Manchuria in 1931 exemplifies the link between economic hardship and political instability.
- Smoot-Hawley significantly impacted Japan, contributing to their militaristic shift and the eventual disintegration of the post-WWI order.
