Doug Irwin
Appearances
Planet Money
Worst. Tariffs. Ever. (update)
Because then you're giving people hope, but then you start pulling on it and there's nothing there.
Planet Money
Worst. Tariffs. Ever. (update)
Did it work out? Anyone? And it turns out both Hawley and Smoot were kicked out of Congress by their constituents ultimately. So it didn't work out for them.
Planet Money
Worst. Tariffs. Ever. (update)
Congress delegated powers to the president to oversee the whole tariff system. So essentially, Congress said, look, we made a mess of it. This didn't work out so well.
Planet Money
Worst. Tariffs. Ever. (update)
They overate, they got sick, and they said they need some restraint on themselves from doing that again. So they just, you know, delegate it to another party.
Planet Money
Worst. Tariffs. Ever. (update)
Come on, Doug. Okay. In 2018, the Republican administration of Donald J. Trump instituted higher tariffs on anyone, anyone, steel and aluminum in an effort to protect the jobs of steel workers. Did it work? Anyone? Anyone? It did not work, and we lost jobs in downstream user industries, and it failed to revitalize the steel industry.
Planet Money
Worst. Tariffs. Ever. (update)
I guess if we were doing that again, I would do the same riff, but include China. But unfortunately, the result would be the same as did the tariffs work? No, they really didn't. China didn't change its policies. They retaliated against U.S. farm exports and bilateral trade went down.
Planet Money
Worst. Tariffs. Ever. (update)
Well, in general, when a country imposes an import tariff, it's taxing its own consumers, and other countries are not paying that tax. So we see that very much with the economic evidence that's accumulated from the Trump administration's tariffs during the first term.
Planet Money
Worst. Tariffs. Ever. (update)
There have been multiple studies by economists that show that basically there was full pass-through of those tariffs to the final purchasers or consumers of those goods.
Planet Money
Worst. Tariffs. Ever. (update)
I can do the first part. In 1930, the Republican-controlled House of Representatives passed the Anyone?
Planet Money
Worst. Tariffs. Ever. (update)
when we saw that President Ronald Reagan in the 1980s limited how many Japanese cars could be sold in the U.S. market, the price of Japanese cars shot up quite a bit, and the price of domestic cars went up as well because it shifted demand to those cars and capacity was limited in the short run, and so the prices went up.
Planet Money
Worst. Tariffs. Ever. (update)
So the similarity between Trump's proposals and Smoot-Hawley depends a little bit on which Trump proposals you consider. If we're just talking about the special tariffs on Mexico and Canada, that's not really a Smoot-Hawley scenario. But if we're talking about the 10 or 20 percent across the board tariffs, that's in the ballpark of a real Smoot-Hawley increase.
Planet Money
Worst. Tariffs. Ever. (update)
Most people avoid economists at parties because we're known to be not exactly the most scintillating of personalities. But all of a sudden, my phone is ringing once again asking about historical analogies and what's going on with tariffs today and what the prospective impact might be. So my holiday is over.
Planet Money
Worst. Tariffs. Ever. (update)
Anyone? Anyone? No, it did not work out well. And the economy sank further into the Great Depression.
Planet Money
Worst. Tariffs. Ever. (update)
There aren't many competitors, I guess, would be one way of putting it. I mean, I think everyone sort of knows of them, but no one has done the deep dive like I have, I guess.
Planet Money
Worst. Tariffs. Ever. (update)
Who's the son of a famous economist, Herb Stein. So they want him to be a boring high school teacher, but they didn't actually script what he was going to say. So they let him rip and he starts talking about the Smoot-Hawley tariff.
Planet Money
Worst. Tariffs. Ever. (update)
Well, first of all, it was delivery mainly because I think you can make Smoot-Hawley exciting. It's during this conflagration, the Great Depression. It has a lot of drama. It has really funny names, Smoot and Hawley, interesting characters, unintended consequences.
Planet Money
Worst. Tariffs. Ever. (update)
So in 1928, the U.S. economy was doing exceptionally well. The stock market was booming.
Planet Money
Worst. Tariffs. Ever. (update)
There was no Great Depression in sight whatsoever. And so one question is, what could the parties fight about in that campaign to try to win voters? And it turns out, while the overall economy was doing well, there's one sector that was being left behind and was not doing well, and that was agriculture.
Planet Money
Worst. Tariffs. Ever. (update)
So one of them is sort of tall and lean. That would be Reed Smoot. And the other is a little shorter and a little squatter, a little fatter, and that would be Willis Hawley. Do you know the Muppets?
Planet Money
Worst. Tariffs. Ever. (update)
Yes. They're the old guys in the balcony who are jeering at the act on stage.
Planet Money
Worst. Tariffs. Ever. (update)
Apparently, there was one firm in Ohio that raised goldfish, and they thought that imported goldfish were eating into their market.
Planet Money
Worst. Tariffs. Ever. (update)
They work day and night. There are a lot of complaints of members of Congress saying how they had to stay up so late listening to people droning on about clothespins and oil drums and certain types of chemicals. New York State Grain and Hay Dealers Association, they made the plea on behalf of the humble buckwheat industry.
Planet Money
Worst. Tariffs. Ever. (update)
I think the buckwheat industry is portraying itself as humble. So they say we are the humble buckwheat industry.
Planet Money
Worst. Tariffs. Ever. (update)
So if you raise the tariff on wool, that's definitely going to help sheep farmers and wool producers. They definitely want that. That's why they were fighting for it. But it also raises the cost of all the manufacturers of woolen goods, trying to produce coats and pants and others for consumers.
Planet Money
Worst. Tariffs. Ever. (update)
Well, because this was considered domestic legislation, pure and simple, and there would be no foreign ramifications. And that was the way it was thought about at the time.
Planet Money
Worst. Tariffs. Ever. (update)
So the tariff on eggs went from 8 cents to 10 cents a dozen. But Canada, they were so incensed, they raised their tariff from 3 cents to 10 cents. Whoa. So that was reciprocity. They wanted the same tariff as we did.
Planet Money
Worst. Tariffs. Ever. (update)
Our exports fell from almost a million dozen to 13,000 dozen eggs over the same period. So our exports of eggs really got whacked.