Donald Trump’s “harmful” tariffs are the same economic policy that “prolonged the Great Depression”, an economist has claimed.
Today, the US President threatened Europe with a 200% tax on alcohol exports, unless the European Commission reduces a 50% charge on American whiskey.
In a post on social media, the US President described the EU as “one of the most hostile and abusive taxing and tariffing authorities in the world”.
"If this tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,” he added.
The comments represent a significant escalation between the Trump administration and the bloc.
On The Hard Shoulder, TU Dublin economist Emma Howard said history shows that Mr Trump’s protectionist policies will harm the global economy.
“History shows us how damaging this kind of tit for tat tariffs, retaliations and moves towards protectionism is for everyone involved,” she said.
“If you look back, Europe and the US have been embroiled in these trade wars previously.
“So, one of the reasons why economists think the Great Depression lasted so long and was so harmful was because of tariffs that were enacted towards the start of that economic downturn.”
President Donald Trump greets Micheál Martin. Picture by: AP Photo/Ben Curtis. After the First World War, many countries decided to introduce tariffs to protect their agricultural sectors from foreign competition.
When the Great Depression began, the US increased tariffs on foreign imports and other countries did the same.
“A lot of countries moved towards protectionism and global volumes of trade fell between 1929 and 1933 by 25%,” Dr Howard said.
“Between the US and Europe, the imports and exports between those two regions by about a third.
“That really prolonged the Great Depression and had a big negative impact on economic growth.”
Donald Trump and Micheál Martin. Image: Newstalk.Speaking to Newstalk from Washington, Micheál Martin urged both sides to get around the table and negotiate a solution.
“I think the only effective way to deal with this is through dialogue between the European Union and the United States Government,” he said.
“We’ve seen some patterns emerge between the ongoing engagements of the US and Canada and Mexico.
“In terms of the European Union and the United States, it needs to get to the dialogue stage because tariffs harm business.”
President Donald Trump signs an executive order. Picture by: AP Photo/Evan Vucci. Irish Whiskey Association Director Eoin Ó Catháin said both sides would suffer in a trade war.
“Any change to this will not work - for any company,” he predicted.
“There’s nobody who is welcoming a tariff on our products.
“The companies that I represent, there’s a number of American companies in there; they have portfolios [with] Bourbons in Kentucky, they have Irish whiskey, they have Scotch whisky.
“So, if tariffs start becoming involved, they’re getting doubly hit - and that’s something we also need to avoid.”
Last year, Ireland exported €72.6 billion worth of goods to the United States.
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Main image: President Donald Trump speaks to reporters in the Oval Office of the White House. Picture by: AP Photo/Ben Curtis.
