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Ten Years of Trump: A Decade of Turmoil

Strategic Insights

— 1 min read

As Donald Trump announced his intention to run for President in 2015, the world was met with skepticism and laughter. Ten years on, it's clear that his presidency has been marked by turmoil, economic downturns, and seemingly inexplicable policy decisions. One such decision is his extensive system of tariffs, which has sparked concerns about the impact on the American economy and the global trade landscape.

Key Takeaways:

  • Trump's tariffs have gone further than the Smoot-Hawley Act of 1930, which raised tariffs on over 20,000 imported goods and raised the dutiable tariff rate to nearly 60%.
  • The Smoot-Hawley Act led to a significant economic downturn, with exports plummeting, GDP halving in four years, and unemployment tripling.
  • Economists have warned of the damaging effects of tariffs, but Trump has consistently disregarded their advice, viewing trade deficits as a sign of weakness.
  • Trump's zero-sum outlook has led to a lack of coherent concept in the Trump administration regarding the purpose of tariffs, with some viewing them as a negotiating tool and others as a source of revenue.
  • The economy is expected to slow down, with inflation likely to rise, the labour market weakening, and a full-scale recession remaining possible.
  • Trump's attachment to tariffs is described as "romantic," with him having supported them for 40 years and describing "tariff" as "the most beautiful word in the dictionary."

Statistics:

  • 1,028 economists signed a petition urging President Hoover to veto the Smoot-Hawley Act.
  • The Smoot-Hawley Act placed tariffs on over 20,000 imported goods and raised the dutiable tariff rate to nearly 60%.
  • America's GDP is expected to grow more slowly, with EY using the phrase "stall speed" to describe the economic Outlook.
  • Trump's tariffs have increased the steel tariff rate from 25% to 50% in just one week.
  • The American economy's GNP halved in four years under the Smoot-Hawley Act, while unemployment tripled.

Sources:

  • (https://www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp#:~:text=The%20Smoot%2DHawley%20Tariff%20Act%2C%20enacted%20in%20June%201930%2C,foreign%20goods%20to%20about%2040%25.)
  • (https://www.cityam.com/people-and-organizations/tariffs/)
  • Herbert Hoover signing into law the Tariff Act of 1930, known as the Smoot-Hawley Tariff Act.

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