Over 1100 Economists, 15 Nobel Laureates and Republican and Democratic CEA Members Agree

Don’t repeat the mistake of Smoot-Hawley tariffs.

A full list of the signatories is here, a Bloomberg article here. An announcement takes place at the National Press Club tomorrow 10AM.

57 thoughts on “Over 1100 Economists, 15 Nobel Laureates and Republican and Democratic CEA Members Agree

  1. Not Trampis

    Smoot-Hawley! what about Reagan and then Bush Jnr??? Didn’t they help US manufacturing.

  2. Steven Kopits

    “The Great Depression was severe in rural Japan, particularly in the northeastern part of Honshu, where falling prices for rice and silk led to famine. Silk was Japan’s major source of dollars, peaking in 1929 at $363 million dollars and employing some 2.2 million Japanese farm households, mostly in Nagano prefecture. Some rural Japanese tenant farmers were driven to selling their daughters into prostitution and encouraging their sons to emigrate to Korea and Manchuria.

    “The effects of the Depression in Japan were compounded by the Smoot-Hawley Tariff Act of 1930, one of the most misguided pieces of legislation ever enacted by the U.S. Congress. This imposed draconian tariffs on imported goods in order to prop up domestic producers, but it also raised prices of goods for consumers and provoked retaliatory tariffs from other nations that deepened the worldwide depression. The traditional ceiling of 90% total tariffs on an imported good, which based on the belief that any industry that could not compete even with a factor of two cost advantage didn’t deserve protection, was thrown aside. Japan was particularly hard hit by the tariffs, since the collapse of the silk market forced Japan to look for other export markets just as Smoot-Hawley slammed the door on Japanese penetration of such markets. Smoot-Hawley came just as the japanese had decided to put the yen back on the gold standard. Attempts to prop up the yen drained half the Japanese gold reserves, worth about $500 million in 1930, in less than a year.

    “These economic disasters fueled popular resentment against capitalism and democracy as embodied in the zaibatzu, Japan’s large industrial combines, and the political parties, which were perceived to be tools of the zaibatsu. Talk of a Showa Restoration, which would sweep away corrupt Western values, was accompanied by the preaching of hakkō ichiu (八紘一宇 “the eight corners of the world under one roof”), which amounted to Japanese control of East Asia and perhaps beyond. This was accompanied by the rise of numerous secret patriotic societies, such as the Black Dragon (Amur River) Society. A conspiracy to overthrow the Japanese government took root in Ibaraki Prefecture and led to the 26 February 1936 mutiny. The 2-26 Incident, as it was known in Japan, marked the beginning of military domination of the government, though the Kwantung Army had already proven its ability to act independently of the civilian government in Tokyo during the Manchuria Incident of 1931.”


    1. Moses Herzog

      @ “Princeton” Kopits
      Hey, “Princeton” Kopits, any updates on Xi Jinping’s unconditional surrender to the Chinese peasantry?? I’m waiting “with bated breath” on your “expert” opinion on what decade State Chairman Xi will get on his knees and ask for forgiveness from the common man.

      “Princeton” Kopits, it looks exactly like what you foresaw, the peasants have State Chairman Xi exactly where they want him. May God have mercy on his soul when the peasants are done with him.

  3. PeakTrader

    It would’ve been more constructive to provide advice how to deal with China’s lying, cheating, and stealing.

    Also, some advice on China building airfields and deploying missiles on disputed islands may also be helpful.

    1. pgl

      “It would’ve been more constructive to provide advice how to deal with China’s lying, cheating, and stealing.”

      OK but then we also need advice to deal with your incessant lying.

      1. PeakTrader

        Rational, informed, and honest point of views that disagree with your illogical, ignorant, and emotional views is not lying. It’s time to grow up, like most liberals when they reach 40.

        1. pgl

          “Rational, informed, and honest point of views “. I would appreciate it if you tried to hold to any of these standards. But you don’t. Don’t flatter yourself. Rather get a better source than Fox and Friends.

    2. Steven Kopits

      It is relatively straight-forward, I think, to have China renounce its claim. Or it would be, if the White House actually had a strategy, and a strategic vision. As it is, the chickens are beginning to come home to roost, on Iran and Israel, on illegal immigration (up 223% in April); on the sustainability of tax reform; on tariffs; and on trade wars with China.

      The US is a supertanker, and it will run on autopilot for a while, but sooner or later, it will hit a reef somewhere without guidance and maintenance. We are now entering the scary part of the program.

  4. Ed Hanson

    Smoot-Hawley started smaller and grew within the ranks of Congress. While it is possible that tariff sentiment will grow as it did in 1930, there is little indication of such and that means tariff adjustments will remain small and not world wide in affect.

    What has been propose does not come close to S-H. Steel and aluminum tariffs are small, not widely targeted, and temporary. The dust up with China is limited to two countries and has no chance of driving the world into the retaliatory tariffs brought on by S-H. And finally the only other tariff discussion out there is bi-lateral country negotiations aimed at fair trade agreements with the intent of lowering or eliminating tariffs. Some caution here is necessary, If negotiations can not be finalized between countries, the stated fallback position will be equalization of tariffs to remove any unfairness toward the US.

    I do have one question, although I consider the S-H warning premature; was the letter also sent to China. And does anyone expect to see equal negative publicity aimed at China. Sure hope so, but history shows a remarkable lax in criticism toward totalitarian Communist States.


    1. Dave

      Ed. Sorry, but that is all crazy talk. Already the EU is talking about retaliating in return for the possible retaliation by the U.S. in return for the EU’s retaliation on account of the U.S.’s enactment of their initial tariffs. And the tariffs haven’t even happened yet. And you are telling us that “tariff adjustments will remain small and not world wide in affect [sic].” Sorry, but that is just crazy talk, or dishonesty probably dishonesty now that I think about it. You sir are a dishonest person.

      1. Ed Hanson


        Talk is cheap, even crazy talk. If you are so comfortable with other country’s retaliation, I will give you a thought. Think in these terms, US retaliates against major trade partners who have run up large trade imbalances. Retaliation is for years of unfair trade practices of those countries by means o higher general tariffs on US goods than the US tariffs on theirs. In addition other non-tariff means US goods at a disadvantage. The US calls on these countries to address these problems to resolve the issues before retaliation goes into affect.

        So now the US is in the retaliatory seat. Therefore, if you are consistent with your reaction, you now must blame the big economies of the EU and China and S. Korea and Japan. Look through the lens of the almost blame America first mentality and you will see how reactions are created.

        By the way, I am not saying the above narrative is any more correct than the current one of blame the US for everything including the end of the world as we know it. The whole matter is quite overblown with many using and creating the furor to advance different objectives other than trade.


        1. Benlu

          One quick way US could help itself is to cut over consumptions attributed to wars in foreign countries and military expenditures for some 800 oversea military bases. No other countries are obliged to balance such US over consumptions.

          1. Steven Kopits

            Here are the list of US demands on China, per the NYT. (We should be discussing them here.)

            ■ Cut its trade surplus by $100 billion in the 12 months starting in June, and by another $100 billion in the following 12 months.

            I really have no idea how China does this. The easiest way would be to cut the US federal budget deficit. This is not China’s problem.

            ■ Halt all subsidies to advanced manufacturing industries in its so-called Made In China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric cars, robotics, computer microchips and artificial intelligence.

            ■ Accept that the United States may restrict imports from the industries under Made in China 2025.

            National security interests may be important in US import policy. Again, this is why the SCS is such bad policy for China. It hurts trade, and for what upside which couldn’t be achieved by other means?

            Also, I think it fair that the US puts tariffs on exports which receive subsidies. I think this is probably more trouble than it’s worth, but not unfair in principle.

            ■ Take “immediate, verifiable steps” to halt cyberespionage into commercial networks in the United States.

            ■ Strengthen intellectual property protections.

            China’s got to compensate US companies for damages.

            ■ Accept United States restrictions on Chinese investments in sensitive technologies without retaliating.

            Should be same for both sides.

            ■ Cut its tariffs, which currently average 10 percent, to the same level as in the United States, where they average 3.5 percent for all “noncritical sectors.”

            Probably not an unreasonable request.

            ■ Open up its services and agricultural sectors to full American competition.

            Services are always tricky, eg, banking regulations may constitute trade barriers. A more open service sector is probably ok, but I don’t know particulars here. As for agriculture, this is fine, if the US is willing to open up its agriculture similarly, since we subsidize our own production. This issue seems a bit ridiculous to me, given how much agricultural product China buys from the US.


        2. Barkley Rosser


          Now that I have scrolled through all the comments I see something important missing from them that your remark is the most egrgriously off regarding. The potential trade war problem Trump is triggering is not just with China, or China, Japan, and South Korea, or them and EU, and maybe the UK as well. It is with two of our four biggest trade partners, Canada and Mexico, with Trump and trade flunkies completely sandbagging the supposed renegotiation of the long established NAFTA. As it is, by some measures we are running a trade surplus with Canada, so your claim that this is all about bilateral trade deficits is wrong, and focusing on those is idiotic anyway. Your comment may be the worst of all here.

          OTOH, I applaud Steven Kopits, whom I sometimes clash with, for his useful historical background on all this.

  5. 2slugbaits

    I’m wondering why it’s only 1100 economists and 15 Nobel laureates. Did most of them not get the memo? Too busy working on final exam questions? Opposing Trump’s tariffs ought to be a no brainer.

    1. pgl

      Don Luskin will likely get his 250 “economists” to beat up on these 1100 economists!

      1. pgl

        Found it!


        My 2005 post on Luskin’s 250 “economists” telling us the George W. Bush’s tax cuts were fiscally responsible (he promised to get 451 and beat the rest of us up) plus his later letter saying why privatizing Social Security would be great. Of course Luskin and his cohorts are complete loons but help me out here. Which one of this loons that signed this stupid letters parades here as PeakTrader.

    2. PeakTrader

      Maybe, many of the other 15,000 economists don’t disagree with Trump’s strategy. And, not all economists live in academia (the college town of Boulder is an island surrounded by reality). How many people disagreed with Trump’s strategy on North Korea initially?

  6. Moses Herzog

    There were at least 2 news sources today saying China has stopped ALL incoming US soybeans. It’s already a done deal on that front.

    1. Steven Kopits

      “We’ve been tracking a reduction in Chinese imports [of U.S. soybeans] for really about a month, or ever since the news first started [about the potential tariff],” said Slunecka. “Most of that market has been sucked up by other countries that we typically don’t sell soybeans to, like Argentina.”

      Argentina’s 2017-18 soybean production is expected to fall to a nine-year low due to drought conditions. As a result, Argentine crushers — producers of soy meal and soy oil — have a big appetite these days for U.S. soy.

      Really, and where are those soybeans going to from Argentina?


      1. pgl

        “Brazil, though, enjoyed record volumes of soybean exports last month, according to Anec, the country’s grain exporter group. Anec put exports at just over 11.6 million tons in April, or about 1 million above the March tally.”

        Your own link. It also notes that soybean prices are falling. This story augments what Menzie has been saying.

        1. Steven Kopits

          I am hard-pressed to find any evidence of China’s actions on this soybean price graph.


          By the way, the notion that China is going to plant its own soybeans is ludicrous. The volumes are just too huge. It would be like saying China can produce its own oil. No, it can’t.

          Having said that, playing I-can-hurt-you-more is a stupid game where someone is going to get hurt, sooner or later.

        1. pgl

          Of course other countries buy soybeans. But China is still our largest customer. Lord Peaky – did you flunk preK arithmetic again?

  7. ottnott

    If you are going to go with the overwhelming consensus of knowledgeable persons, you’ll end up accepting crazy positions like: a 14-billion years old universe; evolution as the explanation of the forms and diversity of life on Earth; the ability of humans to affect the planet’s climate by pumping vast quantities of an infrared-absorbing gas into the atmosphere; the impossibility of bronze-age boat rides for living dinosaurs; a spheroidal Earth; and the desirability of ice cream with warm apple pie.

    1. PeakTrader

      Regarding climate change, there’s no consensus, just a saturation of politics and propaganda. Many experts concluded it’s uncertain how much climate change is caused by humans and how much by natural forces. Even if humans have a significant effect on climate change, burning fossil fuels, it’s not a lasting effect. And, there’s nothing significant we can do about it (the creation and temporary use of fossil fuels is an inevitable destiny).

      1. pgl

        “Regarding climate change, there’s no consensus, just a saturation of politics and propaganda.”

        Two words – B.S. Your dishonesty here is beyond the pale.

        1. PeakTrader

          Then, what’s the consensus how much of climate change is caused by humans and how much by natural forces – let’s hear your honest conclusion.

          1. uesstion.

            Pgl, answer Peak’s question. Show with current science. We would like to see the definitive percentages for man vs nature.

          2. PeakTrader

            Sure, when you ignore all the natural factors that cause climate change, you can easily blame it all on humans:

            UK Professor Emeritus of Biogeography Philip Stott of the University of London explains the crux of the entire global warming debate and rebuts the notion that CO2 is the main climate driver. “As I have said, over and over again, the fundamental point has always been this: climate change is governed by hundreds of factors, or variables, and the very idea that we can manage climate change predictably by understanding and manipulating at the margins one politically-selected factor (CO2), is as misguided as it gets.”

          3. PeakTrader

            The Little Ice Age ended around 1850 and climate change takes place quickly and substantially with no human influence whatsoever:

            “During the Last Glacial Maximum, much of the world was cold, dry, and inhospitable, with frequent storms and a dust-laden atmosphere. The dustiness of the atmosphere is a prominent feature in ice cores; dust levels were as much as 20 to 25 times greater than now. This was probably due to a number of factors: reduced vegetation, stronger global winds, and less precipitation to clear dust from the atmosphere. The massive sheets of ice locked away water, lowering the sea level, exposing continental shelves, joining land masses together, and creating extensive coastal plains. During the last glacial maximum, 21,000 years ago, the sea level was about 125 meters (about 410 feet) lower than it is today.”

          4. 2slugbaits

            PeakTrader You asked for the consensus estimate of how much of climate change is caused by humans and how mucy by natural forces. Here’s your exact question: what’s the consensus how much of climate change is caused by humans and how much by natural forces

            You threw out a challenge and you got your answer. You can agree or disagree with the scientific consensus, but you got the answer to the question you asked. Now please stop hijacking the thread and return to the main subject, which was about the economic effects of Trump’s tariffs.

          5. PeakTrader

            2slugbaits, to believe 100% of climate change is caused by humans is ridiculous. Less than a hundred years ago, the consensus of physicists believed the universe is static, but we now know it’s expanding. They were all wrong (including Einstein). Climate change predictions have been wrong. There’s propaganda, humans believe they’re too important, and politics and funding are heavily involved, which skew results. It’s not unbiased. There are many scientists, who don’t accept the methodology, cannot conclude humans have a significant effect, or don’t discount the effects of natural forces. Many scientists aren’t included in the “consensus.”

          6. CoRev

            2slugs, figure one of the Carbon Brief article lists a series of sources/forces FACTORS for heating change. Since you think it requires math skills, did you notice how many of those factors on the list were actual measurements? Otherwise these models-based factors are best guesses which are already old. Your reference, although sciency soundings references: “Similarly, the recent US fourth national climate assessment found that between 93% to 123% of observed 1951-2010 warming was due to human activities.” was actually from IPCC AR4, is well over a decade old.

            Recent science, such as “The impact of recent forcing and ocean heat uptake data on estimates of climate sensitivity “, https://journals.ametsoc.org/doi/10.1175/JCLI-D-17-0667.1 shows those older ARs were as much as 50% high on their estimates, or best guesses from your own reference. If you don’t know we are in the fianl stages of creating the next IPCC AR which should include ome of this later science.

            BTW, I had a typo in my request to pgl, and it wam me, corev who asked.

    2. Steven Kopits

      If you’re going with the overwhelming consensus, all this ends in a 150,000 year ice age starting sometime in the next 5-10,000 years.

  8. pgl

    “The original letter was sent 88 years ago to urge U.S. lawmakers to reject the Smoot-Hawley Tariff Act, but it didn’t work. The law passed in 1930 and was a key factor in a trade war that deepened the worldwide economic slump.”

    Smoot-Hawley did not cause the Great Depression. It still was a mistake but to what extent did it deepen the slump?

    1. pgl

      “At the sites, which would be called Overdose Prevention Centers, trained staff would be available to administer medications, such as naloxone, to counteract drug overdoses. Social workers would also be on hand to possibly counsel drug users in the hope that they could be steered into programs intended to help them with their addiction. The sites would be financed and run by nonprofit groups authorized by the city, and may be located within social service providers that already operate needle exchange sites.”

      My mayor has a good idea. Too bad my governor cannot find the funds to finance my mayor’s good ideas.

      1. Steven Kopits

        If you legalize it, then this is a major profit center. Don’t get me wrong, I am not for heroin, or even marijuana use. But the cost / benefit on legalization is not close.

    2. PeakTrader

      The Japanese know how to solve drug problems:

      Fighting Drugs in Four Countries: Lessons for America?
      September 24, 1990

      “The Japanese in 1954…inaugurated a system of forced hospitalization for chronic drug users. Under this policy, drug users were rounded up in droves, forced to go through cold-turkey withdrawal and placed in work camps for periods ranging from a few months to several years.

      This approach to drug users, still in force today, is seen by the Japanese as a humane policy focussed primarily on rehabilitation. By American standards, however, these rehabilitation programs would be seen as very tough.

      The Japanese from the very beginning have opted for a cold-turkey drug withdrawal. Thus, every heroin addict identified in Japan is required to enter a hospital or treatment facility, where they go immediately through withdrawal.

      Conviction through the criminal justice system is not necessary for commitment. Any addict identified, either through examination by physicians or through urine testing, is committed through an administrative process.

      As a result courts are not burdened with heavy caseloads of drug users, drug users are not saddled with criminal records and punishment for drug users is swift and sure.

      These policies dramatically and rapidly cut drug use. Within four years of the 1954 amendments, the number of people arrested for violating the Stimulant Control Law dropped from 55,654 to only 271 in 1958.

      Japan began experiencing serious problems with heroin. By 1961 it is estimated that there were over 40,000 heroin addicts in Japan…tougher penalties against importation and selling, and by imposing a mandatory rehabilitation regime for addicts.

      The results of Japan’s tough heroin program mirrored those of its successful fight against stimulants. The number of arrests for heroin sale and possession fell from a high in 1962 of 2,139 to only 33 in 1966 and have never risen above 100 since.”

      1. Steven Kopits

        This is demand-side management. I am all for that. I don’t know, from a professional sense, whether the Japanese approach is the right or not. The results certainly look impressive.

        1. noneconomist

          A few words. Or more.
          Japan is an island nation about the same size as California with a population of 127 million, most of whom are coastal. That’s about 200 million fewer people than here. Japan is also far more culturally insular. While Tokyo may have a “Little Los Angeles” somewhere within, it might be quite difficult to find–while in Japan–many “Little Saigons”, “Little Havanas” Little Juarezes” or their likes . (Fortunately, no “Little Bakersfields” or “Little Barstows.” Yet.)
          It isn’t that difficult here. Nor is it hard to find areas here where you can find multiple languages being spoken–and used commercially–in a small geographic region. Oh, and I’m guessing (sorry, no data) while you find plenty of China “persons” in various places throughout this country (as well as a few famous China “person” towns), that’s not the case in Japan.
          Of course, even with the large multi cultural populations here, it would be possible to attempt severe demand restrictions. That would, of course, eventually require more courts, judges, courtrooms, police officers, jails, prisons, probation officers (with mental health training?), et. al. All of that from all levels of government. Why, we even have a Republican candidate for governor in California who’s floated the idea of hospitalizing marijuana users in order to cure them of their disease. There aren’t enough hospital rooms on the West Coast–or the country as a while– to pull that off, but that’s another story for another day.
          However, it the idea is to get tough on those substances/products that can kill by getting “tough” on the offenders, how is it that we allow tobacco purchases to continue though heavily taxed in many places (although not generally in those rural areas that also suffer from the opioid scourge with plenty of liquor–another proven killer—also available) ?
          Following PT’s logic, it would make far more sense to be much tougher on tobacco, which kills 7X more people each year than opioids. and on alcohol, which also continues to take a greater toll. If restricting demand works, why not get serious with all dangerous substances?
          Just because it would be a waste of time and money is no reason not to try, right?

          1. PeakTrader

            There can be moderation with tobacco and alcohol, but not with cocaine, heroin, LSD, etc..

            A cigar and a glass of wine after work is far less harmful than a dose of LSD, for example.

            And, there are enormous social costs with mind altering drugs. Legalization may reduce enforcement costs and will create profit, but would be small compared to the increase in social costs. Private benefits may be large, but hard to quantify.

          2. PeakTrader

            It should be noted, there was a steep rise in drug use in the ‘60s and ‘70s. Congress became alarmed and overwhelmingly passed strict drug laws. Shortly thereafter, the steep rise in drug use slowed, stopped, and reversed, although there were periodic epidemics, since then, e.g. crack cocaine and opioids. Tobacco use is down, along with alcohol, including drunk driving.

  9. Barkley Rosser

    BTW, I would have signed the petition, but this is the first I have seen of it.

  10. Barkley Rosser

    A further btw, I see that I am in good company as Jim Hamilton is also not on the list, although you are, Menzie, :-).

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