here’s a look at six past trade wars and the havoc they caused to theglobal economy.
1. The Opium WarsWhen China attempted to suppress the opium trade in the mid 19th century —an illegal activity enjoyed mostly by British traders and the cause ofwidespread addiction and social problems — it led to armed conflict.
Or, as one analyst bluntly put it: “England went to war with China becauseit was upset that Chinese officials had shut down its drug traffickingracket and confiscated its dope.”China burned more than 20,000 chests of opium, leading to a conflict whichresulted in the ceding of Hong Kong to the British and an increase in thenumber of treaty ports where British ships could trade and reside.
A second conflict erupted when the British forces — this time joined by theFrench — fought again to extend their trading rights in the region. Theend result was the establishment of more than 80 new treaty ports in China,the legalization of the importation of opium and rights for all foreigntraders to travel within the country.
2. Franco-Italian trade warAiming to foster its own fledgling industries, Italy turned to protectionismin 1886, ending its trade agreement with France and placing tariffs as highas 60 percent on French imports. France retaliated and trade felldramatically between the two countries.
The result was the passing of the protectionist Méline Tariff in 1892 whichessentially ended France’s dalliance with free trade. The trade disputealso had the unintended consequence of pushing Italy closer to Germany andthe Austro-Hungarian empire in the lead up to World War I.
3. US-Canadian trade warsThe Canadian-American Reciprocity Treaty, signed in 1854, was a tradeagreement between the United States and the United Kingdom which applied toBritish colonial possessions, including Canada.
After the US Civil War, the Reciprocity Treaty with Canada was abolished; anact which kicked off decades of tit-for-tat trade measures and tariffretaliations. Unfortunately for the US, its protectionism policies led tothe fleeing of American companies out of the US — perhaps with sweet irony,to Canada.
By the late 1880s, about 65 US manufacturing plants had relocated to Canada— and it took nearly a century for free trade to develop between the US andCanada again.
4. Smoot-Hawley Tariff Act 1930Some economists blame the Smoot-Hawley Tariff Act of 1930 for exacerbatingthe Great Depression. Implemented with the aim of saving US factories, theact raised tariffs on more than 20,000 kinds of imported goods — despite apetition signed by more than 1,000 economics and threats of retaliation fromother countries.
The act did not revive the American economy, as its architects envisioned,however. Instead, it is blamed for spreading protectionist policies aroundthe globe, helping global trade plummet by about 26 percent in the yearsafter its signing.
Smoot-Hawley “was such a disaster that it’s held sway over American tradepolicy for over 80 years,” said Joshua Meltzer, a senior fellow at theBrookings Institution who teaches international trade law at Johns HopkinsUniversity. “No one wants to repeat it.”Following World War 2, the World Trade Organization was formed to regulateinternational trade and prevent a repeat of destructive trade policies.
5. The Chicken WarCheap chickens sparked a trade war between the US and Europe at the heightof the Cold War. The ‘Chicken War’ of 1963 erupted when France and Germanycomplained about the importation of inexpensive chickens from the US.
France and Germany slapped tariffs on American imported chicken and inresponse, the US placed a 25 percent tax on imports of Volkswagen microbuses, potato starch, dextrin and brandy imported from Europe.
The tariff significantly hurt German automaker Volkswagen and it stillstands for imported light trucks today.
6. Cuban embargoThe first US trade embargo on Cuba began in October 1960 and covered all USexports to Cuba apart from medicine and select foods. The embargo was laterexpanded to cover US imports from Cuba in 1962. The blockade was ordered byPresident John F. Kennedy in protest at Fidel Castro’s leadership and hisalignment with the Soviet Union.
Taking hypocrisy to dizzying levels, hours before signing the embargo,Kennedy ordered a personal shipment of 1,200 Cuban cigars for his ownenjoyment. Later, Kennedy’s press secretary Pierre Salinger visited theSoviet Union and was gifted with 250 Cuban cigars from Soviet leader NikitaKhrushchev, which he smuggled back into the US.
The US’s blockade of Cuba still stands today and it would require an act ofCongress to remove it — something which would be highly unlikely,particularly under a Republican administration.
If history is any indicator, it seems trade wars are not “good” or “easyto win” as Trump has claimed.
In fact, they rarely result in big wins for anyone; they can sometimes havethe opposite to the intended effect — and they are ultimately pyrrhicvictories whose negative impacts can reverberate for decades.
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