The 6 Pack Economist

 A baby of the protectionist in the US is raising tariffs or restricting what can be imported.  I am not against restricting products from some crazy dictator or murdering nut job but usually it restricts stuff from a country like Canada. So is this Smoot-Hawley part 2? 

I know that most people’s understanding of history is on par with their understanding of particle physics in a singularity but something similar happened during a past round of economic turmoil.  This was brought by republicans in the 30’s.  It was called the Smoot-Harley Tariff Act and a bunch of protectionists thought it was great to just kill all imports. 

Let me preface this by relating a rule of life “Never screw people who can screw you too”.  This held true through the cold war.  The US and USSR never shot their Nuclear ICBM at each not because they were buddy-buddy but because they knew the other guy would shot back and everyone would lose.  Large tariffs against other-wise descent trading partners work the same way. 

The current economic “stimulus” package has some rule about only buying US steel which means it is not a tariff deal per-say.  But this spending package is the GDP of many other nations.  So by keeping other countries out of the deal it is working like a tariff.  In addition other countries are going to be doing their own stimulus packages and US goods will be restricted from theirs.  In the end it may just have a very similar effect of smoot-hawley tariff, although not nearly as devastating.