⚠️ Trump’s Trade Plan Raises Specter of Smoot-Hawley Tariffs
Trump’s trade plan is drawing sharp warnings from economists and former policymakers, with one ex-Federal Reserve official cautioning that it could lead to a catastrophic repeat of the 1930s Smoot-Hawley tariffs that worsened the Great Depression.
In an interview with CNBC, James Bullard, former President of the Federal Reserve Bank of St. Louis, said Trump’s aggressive tariff strategy has “dramatically raised the risk” of a global trade collapse.
📉 Bullard Warns: Trump’s Trade Plan Mirrors Smoot-Hawley Fallout
Could Tariffs Trigger a Modern Economic Crisis?
Bullard didn’t hold back: “This has dramatically raised the risk of a Smoot-Hawley type outcome,” he said. “Global trade collapsed, and the Great Depression was on. That’s what has people worried about this.”
The Smoot-Hawley Tariff Act of 1930, passed to protect U.S. jobs, ultimately backfired by deepening the Depression. Bullard fears Trump’s trade plan could repeat history if not reined in.
🎓 Former Fed Official Calls for Caution on Trump’s Trade Plan
Bullard: “You Could Get a Dramatic Downturn”
Bullard, now dean of Purdue University’s Mitch Daniels School of Business, said the tariff-heavy direction of Trump’s trade plan is dangerous: “You could get a dramatic downturn in the economy.”
However, he added that this isn’t necessarily a done deal. The tariffs might not hold up legally.
🧑⚖️ Is Trump’s Trade Plan Executive Overreach?
Courts May Block Sweeping Tariff Moves
“What’s the chance this will stick through the courts?” Bullard asked. He believes Trump’s trade plan could be challenged as executive overreach, since such sweeping trade measures typically require Congressional approval.
“Who wants to invest when you don’t know what the rules are going to be?” Bullard added, voicing concern over the chilling effect the uncertainty may have on business confidence.
🧠 Final Thought: Trump’s Trade Plan Could Shake the Global Economy
Whether this is a short-term negotiating tactic or a full-on shift in U.S. trade policy, Trump’s trade plan is stirring fears among economists, investors, and historians alike. The question now is whether the courts—or Congress—will step in before damage is done.
