
History-blind tariffs drive US towards recession: Oliver

The thing that has come upon us is that which we feared most: Based on the take of AMP chief economist Share Oliver, the impact of United States President Donald Trump’s tariffs could be - pardon the euphemism - of biblical proportions. Oliver is referring specifically to Trump’s tariffs announced overnight (Thursday AEDT), which based on his rough calculations, will take the U.S. average tariff rate to above levels seen in the 1930s after the Smoot/Hawley tariffs. Without putting too fine a point on it, the Smoot-Hawley Tariff warrants a brief history lesson. Most economists believe the Smoot-Hawley Act of 1930, which imposed rates as high as 41%, triggered a trade war that collapsed global trade, and helped transform the nascent recession into a decades-long global depression. However, Trump clearly doesn’t see it that way. In a recent speech, he blamed the Great Depression on the U.S. removing tariffs in 1913 and replacing them with an income tax. Like most of his economic peers, Oliver believes the current round of tariffs will by default heighten the risk of a U.S. recession – via a further blow to confidence and supply chain disruptions – and a big hit to global growth. “The risk of a US recession is probab