Report Wall Street Italia
The care of Mario Lettieri* e Paolo Raimondi**
If the United States, the world's leading economic and military power, they launch one protectionist policy imposing high tariffs on imports, they evidently intend to start a real trade war. Trump's recent statements towards China and the European Union are proof of this.
Yet Washington knows that, when similar policies have been introduced in the past, they have only exacerbated the ongoing crises by making them worse international political tensions.
This happened after Wall Street crash of the 1929 resulting in the Great Depression. In the 1930 President Herbert Hoover and, even more, the American Congress, then dominated by the Republican Party, they passed the Smoot-Hawley Tarif Act (from the names of the two parliamentarians who presented it) which imposed heavy duties on over 20.000 imported products.
It was a kind of "America First” which was supposed to relaunch productions, consumption and employment, sbarrando la strada ai prodotti provenienti da altri paesi. It was the negative response to the general appeal made previously, In the 1927, by the League of Nations, precursor of the UN, That, on the contrary, asked to “put an end to the tariff policy and to go in the opposite direction".
Until then the USA had had a positive trade balance, with an export surplus. Duties imposed on goods included in the list, which on average were of 40,1% In the 1929, they reached the level of 59,1% In the 1932, with an increase of 19%. Obviously many studies have been done on these restrictive policies. But no one questions it the recessive and depressive effect caused by duties.
In the four-year period 1929 – 1933 American imports decreased by 66% and exports fell by 61%. Also export-import with Europe collapsed.Il Arrow USA passed by 103 billion dollars of 1929 a 76 In the 1931 and a little more 56 In the 1933. World trade as a whole also fell by approximately 33%.
During the same period, American unemployment rose from 8 percent 1930 al 25% In the 1933. This trend changed only during the Second World War with the great mobilization of war production. Unfortunately today there is a tendency to ignore the lessons of the past.
The USA and American corporations were the ones who started the so-called policy ofoutsourcing and to bring the production of components of manufactured products abroad, because it is there low cost labor.
It was the Federal Reserve that flooded the world, especially emerging economies, with lots of liquidity at very low interest rates. It was the famous Quantitative easing which favored the purchases of goods abroad by American companies and at the same time supported domestic consumption. On the contrary, emerging countries have seen their debts grow and have accentuated their own financial destabilization.
The economy was then turned upside down, generating huge deficits in the trade balance American and many other countries. Consider that in 2006 in the USA it was 762 billion dollars and in 2017 it was still of 566 billion. However, the trade deficit in the real goods sector goes far beyond that 810 billions of dollars.
Consequently also the US federal budget has gone haywire with sensational deficits: beyond 1400 billion in 2009, 1300 billion in 2011 and again 665 In the 2017. This year it should rise to more than that 830.
These policies have led to large American indebtedness also abroad, in particular verse at dinner, which holds approx 1.000 billions of dollars in US Treasury bonds, evidently issued to cover budget deficits.
Unfortunately, Washington is moving like an elephant in a china shop. It causes tensions with business partners, starting with China andUe, and at the same time it continues to expose itself with deficits and debts that the rest of the world should in some way guarantee.
There is a strong fear that any unpredictable event in the economic and financial field could generate trade and monetary wars with incalculable consequences. Obviously not only in the USA.

*former undersecretary of the Economy **economist