While I hope this doesn't play out the same way, this article from yesterday's edition of The Washington Post may be something to be concerned about.
The original Smoot-Hawley Tariff was not expected to have the impact that it actually did. The original bill (as outlined in this article from The Economist) was designed to set tariffs on agricultural products from a small number of countries. The final version suffered from so many add-ons that it effectively injured world trade just as the economy was dealing with a downturn. Bad timing to say the least. Is retaliation something that should be expected when passing this type of legislation? My view says yes, but I may be missing something.
Let's hope thing don't get out of hand, just as we were starting to see "green shoots." I look forward to your comments.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
3. All choices have consequences.
and
6. Do what you do best; trade for the rest.
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