Economist Thomas Sowell on Monday compared the tariffs implemented during the Great Depression to President Donald Trump’s aluminum and steel duties.
“The Smoot Hawley tariffs of 1930 had a lot more to do with the Great Depression than the stock market,” Sowell told FOX Business’ Neil Cavuto on “Cavuto: Coast to Coast.” “Unemployment was nowhere near as low the first year after the stock market as it was in the first five months after those tariffs went in. During the Great Depression in the 1930s, we had trade surpluses, but it didn’t do us a bit of good.”
Earlier this month, the president announced that the United States will impose a 25% tariff on steel and 10% on aluminum. There is also speculation that the president is considering imposing broad tariffs on imports from China.
“Conceivably, a catastrophic mistake depends on how far he wants to push it,” Sowell said.
According to Reuters, 45 U.S. trade associations are urging Trump not to impose sanctions against China, saying that they could hurt U.S. consumers and the economy.
Sowell warns that setting in place tariffs will “cut down” on the overall volume of international trade.
“You can’t control it,” he said. “You start it, and you can’t stop it. That’s the bad part. Other countries will already be taking retaliatory measures. And the net result is that all of the countries put together are going to lose.”