Trade Wars are not New

Trade Wars are not New

The snowballing trade war between the United States and the European Union is the latest in a string of global disputes over imports.

Here is are some key international trade wars throughout history:

– 2002, US steel tariffs on EU imports –

Republican President George W. Bush imposes tariffs from 8 to 30 percent on a range of imported steel products.

The measures, aimed at propping up the American steel industry during full restructuring, affect nearly 29 percent of imports.

The EU lodges a complaint with the World Trade Organization (WTO) and publishes a list of American products that it threatens to tax up to 100 percent including fruit juice, T-shirts and even underpants.

After losing to the WTO, George W. Bush finally resolves to eliminate the tariffs in December 2003.

– 1985, “The Pasta War” –

US President Ronald Reagan hits pasta imports from Europe in order to protect the domestic industry.

The European Economic Community (EEC) responds with tariffs on American imports of lemons and nuts.

The standoff lasts nine months, before the US and EEC reach an agreement.

– 1961-1964, “The Chicken War” –

In the early 1960s, France and Germany jointly decide to tax American chicken imports after the US brings in factory farming and poultry prices plummet.

The US retaliates with taxes on a series of products from potatoes to brandy, but also crucially Volkswagen buses and French trucks.

The “Chicken Tax” remains in place today and is still affecting consumers and industries.

– 1930, The Smoot‒Hawley Tariff Act –

Shortly after the Wall Street Crash of 1929, the US passes the Smoot‒Hawley Tariff Act, considered the most aggressive protectionist measure in recent history.

Despite the warnings of many economists, heavy duties are imposed on more than 20,000 imported products as the Great Depression takes hold.

Canada leads the backlash, as trading partners respond with tariffs on US exports, which dropped by almost two thirds from 1929 to 1933.

– 1890, The McKinley Tariff –

A tariff act drawn up by Republican lawmaker William McKinley slaps customs duties on all US imports by almost 50 percent with the aim of bolstering government coffers and protecting domestic industries from foreign competition.

The measures do boost the production of tin-plates in the US — but also fan inflation. The tariffs are lowered in 1894 when the Republicans lose their majority in the House of Representatives.

McKinley goes on to serve as president from 1887 to 1901.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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