In the trade war, different policies will produce very different endings. The Boston Tea House case brought the American Revolutionary War, and the Smoot-Hawley Tariff Act ended in disastrous defeat. Let’s go back and see what impact these seven trade wars have had on the United States.
Boston Tea House
Principal Participants: North American Colonial People, British Parliament
Trade weapons: tea
“No representation, no taxation” – this is the loud slogan that a group of North American colonists shouted at the Griffin Pier in Boston on December 16, 1773. They are against the various taxation policies imposed by the British government. In 1765, the British Parliament enacted the Stamp Tax Act, and two years later the Townsend Act was issued. This series of bills has allowed the North American colonies to be taxed everywhere, from newspapers to playing cards, from paint to glass. Of course, this is naturally indispensable for tea.
In 1770, the colonial people of North America clashed with the British army and the Boston massacre occurred. Afterwards, the King of England terminated any taxes on the colonies, but retained the tea tax. This protection of the British East India Company caused a strong resistance from the North American colonies and spurred tea smuggling. On the night of December 16, 1773, under the leadership of John Hancock, John Adams, and Paul Revere, members of the American Anti-Colonial Association’s “Child of Freedom” will have 342 boxes of tea worth more than 90,000 pounds at the time. All poured into the Boston Bay to show resistance.
After the incident, the British Parliament and King George II issued a series of “enforcement orders.” According to these decrees, the Boston Harbor is closed until the damaged tea is compensated to be open; the autonomy of the Massachusetts area is revoked; the British may enter the colonial homes as needed. This aroused the joint resistance of the colonial people, who claimed that the United States had the right to manage itself. Finally, on April 19, 1775, the American Revolutionary War broke out.
Boston Tea House
Smite-Hawley Tariff Act
Principal participants: the United States, Canada, European countries and other countries
Trade weapons: thousands of imported goods
In the early days of the Great Depression of the last century, the agricultural crisis in the United States has already appeared. When President Herbert Hoover proposed to increase import tariffs on agricultural products, its original purpose was simply to help farmers get out of trouble. However, the bill proposed by Senator Reed Smutter and Willis C. Holly covers more: in addition to agricultural products, they also require an increase in import tariffs on industrial products. Thousands of economists co-authored President Hoover and hoped to veto the bill. However, President Hoover finally signed the Smoot-Hawley Tariff Act in 1930. In retaliation, a global trade war against the United States broke out. The worsening US economy has become worse and worse.
President Herbert Hoover is lobbying farmers for the Farmland Relief Program.
After the adoption of the Smoot-Hawley Tariff Act, many countries adopted retaliatory tariff measures against the United States, and Canada joined them. As of 1933, US exports plummeted 61%. The US economy has not recovered, but has worsened. The economic downturn allowed President Hoover to lose to Franklin Roosevelt in the next race. Of course, Smatter and Holly were also dismissed. In 1934, under the proposal of President Roosevelt, the US Congress passed the Reciprocal Trade Agreement Act. The bill, while replacing the Smoot-Hawley Tariff Act, also gives the President of the United States the right to negotiate tariff increases and decreases.
Chicken trade war
Main participants: USA, France, West Germany
Trade weapons: chicken, brandy, cars and other goods
In the 1960s, the rapid development of large-scale farming caused a sharp drop in the price of chicken in the United States, so the amount of imports from European countries increased sharply. The Americans are making a big deal. The farmers in France and West Germany are very uncomfortable. They have asked for tariffs on poultry imported from the United States. Seeing that the US poultry industry was hit hard, then President Johnson implemented a retaliatory measure – a 25% tariff on goods imported from Europe, such as light trucks, brandy, potatoes and starch.
In this trade war, the Japanese auto industry, which has a higher proportion of light trucks, has suffered losses as light trucks have to pay more tariffs. In order to evade sanctions, Japanese auto companies such as Toyota and Isuzu have intentionally drilled policy loopholes and started investing in factories in the United States to assemble auto parts. Because according to the US tariff policy, imported cars and their parts and components must be subject to tariffs. However, if the parts are assembled in the United States, there is no need to pay import duties.
In 1963, poultry supplier Bill Simmons and his flock.
Japan-US trade war
Main participants: USA, Japan
Trade weapons: cars, electronics, motorcycles
In the eyes of the US government, Japan in the 1980s was not a well-regulated trading partner. In 1987, the then President Ronald Reagan imposed punitive tariffs on Japanese goods worth $300 million on the basis of the original tariffs, including computers, power tools and televisions. The Reagan administration claims that this is a counterattack against Japan’s breach of commitment. Because according to the original agreement between the two countries, Japan should systematically open its domestic market to the entire US industry and stop the underpricing of US semiconductor computer chips. In addition, throughout the 1980s, Japanese cars were subject to high tariffs.
Japan chose not to fight back. Tian Cunyuan, the minister of industrial and commercial affairs in charge of industrial and commercial affairs, said: “In order to avoid further losses to the global free trade system, the Japanese government decided not to take any retaliatory measures.” Anna, an economist at Merrill Lynch Bank of America. Zhou and Ethan Harris believe that the tariff policy has not slowed the US trade deficit. Although Japanese auto sales in the US market fell by 3%, American consumers are also suffering losses. In the year 1984 alone, they paid an additional $53 billion for import duties on various commodities.
In 1987, US officials smashed the Japanese Toshiba radio.
In 2017, an employee at a sawmill in West Virginia was using a forklift to move logs. Housing demand is growing, and the US government has imposed tariffs on imported timber, which together contributed to the soaring US timber prices to a record high in 13 years.
Timber trade dispute
Main participants: United States, Canada
Trade weapons: softwood (pine, cedar, fir)
In the US-Canada timber market, the pricing mechanisms for timber in the two countries are different. Canada’s timber is mainly mined in public land, so its government can control the market price of timber; US wood is mainly mined in private land, which means that its price is mainly driven by the market. This difference directly leads to fierce conflicts between the US and Canada in the timber trade. In 1982, the United States accused the Canadian government of imposing government subsidies on its cork, contrary to the principle of fair competition. As a result, the US-Canada timber countervailing trade disputes, which have continued for many years, officially kicked off.
By 2018, the Canadian government has to pay hundreds of millions of dollars in softwood tariffs, and American consumers cannot “get alone.” When the US construction industry flourished, its cork prices also rose, breaking the historical high. According to US media reports on the timber industry, as of 2018, the cost of timber in western Canada has soared by about 40%.
In 2006, a worker in Tegucigalpa, the capital of Honduras, was carrying bananas from the warehouse of the farmers’ market. At that time, the Honduran government submitted a request to the WTO, hoping that the EU could reconsider the tariff policy on imported bananas.
Banana trade dispute
Main participants: the United States, the European Union, and Latin America
Trade weapons: bananas, European luxury goods
Only Hawaii and Florida are rich in bananas in the United States, but American companies control most of the banana farms in Latin America. In 1993, the EU imposed high tariffs on fruits imported from Latin American countries and deliberately took care of the banana exporters of the former British and French colonies in the Caribbean. The United States filed a complaint with the WTO. In retaliation, the United States also imposed tariff sanctions on French women’s bags, British linen and Danish ham.
After eight rounds of difficult economic and trade consultations, the EU finally agreed in 2009 to gradually reduce the tariffs. In 2012, the US-European banana trade dispute finally ended. In response, the then US Secretary of State Madeleine Albright complained: “I never thought I would waste so much time on the bananas.”
The British Conus Group is producing steel. On the same day, a trade union leader claimed that the European steel industry would lose more than 5,000 jobs due to US tariff policies.
Steel trade war
Main participants: the United States, the European Union
Trade weapons: steel, citrus
In 2002, in order to revive the domestic steel industry, the Bush administration announced a tariff of 8% to 30% on various imported steel products for a period of three years. Canada and Mexico and the United States belong to the “North American Free Trade Area”, so they are exempt from tax increases, but the European Union, as the largest source of imported steel at the time, suffered the most damage. The European Union immediately introduced counter-measures, announcing a retaliatory tariff on commodities such as citrus and American cars in Florida. At the same time, the EU appealed to the WTO, and ultimately the WTO ruled that the United States violated trade rules. In December 2003, President Bush announced the cancellation of the 18-month import tariff on steel. This round of trade war has come to an end.
Most economists feel that this is an impact on the US economy because it raises steel prices. According to data from the Peterson Institute for International Economics, this round of trade war has also caused the steel downstream industry to lose 26,000 jobs. However, some analysts believe that the employment of the steel industry is not completely non-growth, and in the middle and late stages of the trade war, the profits of the US steel industry have also increased slightly due to the sharp rise in steel prices.