In addressing the trade imbalance with China, Trump addressed an issue that has been a focus of his speeches going back to 201. In the editorial board meeting, Trump said that the relationship with China needs to be restructured.
“The only power that we have with China,” Mr. Trump said, “is massive trade.”
“I would tax China on products coming in,” Trump said. “I would do a tariff, yes — and they do it to us.”
The Tariff Act of 1930 signed into law by U.S. President Herbert Hoover on 17 June 1930 was duties (taxes) placed on over 20,000 imported goods. Its political intent was to preserve American jobs, particularly in the agricultural sector, by discouraging foreign imports. Quoting the US Dept. of State on the origin of the Act:
During the 1928 election campaign, Republican presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups, and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history. Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations.
What was the effect of the tariffs imposed in 1930?
As other countries placed tariffs on American exports in retaliation, these tariffs actually led to the reduction of American exports and thus jobs:
U.S. imports from Europe declined from a 1929 high of $1334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2341 million in 1929 to $784 million in 1932. Overall, world trade declined by 66% between 1929 and 1934. [US Dept of State]
With the reduction of American exports came also the destruction of American jobs, as unemployment levels which were 6.3% (June 1930) jumped to 11.6% a few months later (November 1930). As farmers were unable to pay back their loans to banks, their loan defaults led to increasing bank crashes, particularly in the West and Mid-West.
Like Trump, Hoover was a progressive pretending to be a Republican. Like Trump, Hoover had gained his fame as a business person. Like Trump, Hoover claimed his business experience was a great fit for the American Economy. Like Trump, Hoover said tariffs were the answer to jobs and prosperity in the United States. Like Trump, Hoover failed to understand that autonomous countries can and will act in a way they think is in their best interest. Trumps proposal is just that a proposal. Hoover’s proposal became law and the inevitable result is history.
The way to bring about prosperity and great jobs in the United States is to create a very friendly business climate in the United States; lower taxes, greatly reduce regulations, abolish Obamacare, restrict the tyrannical power of the IRS, EPA, and OSHA, and show businesses that we want them to operate within our borders by action and not lip service. You would have thought the business man Hoover would have understood that concept. You would think Trump the business man would understand that concept. Hoover did not and Trump does not because progressives do not. Progressives always believe government is the answer. Conservatives understand government is always the problem.