The secret weapon that turned on Britain – and exposed the danger of Trump’s trade wars
On the eve of World War I, European countries adopted protectionist policies, which were expressed in protective tariffs and trade wars, which increased economic and national rivalries. Britain, which was at the height of its power, passed a law back in 1887 that every commodity must be stamped where it was manufactured. THIS IS HOW THE CONCEPT OF MADE IN GERMANY WAS CREATED, WHICH WAS MEANT TO MOCK GERMANY.
The “Made in Germany” surprise
Within a few years, the British constraint had become a double-edged sword, and the stamping “Made in Germany” had become a brand of quality. Germany, which had an advanced industry compared to other European countries, needed new markets, felt trapped from access to trade markets due to other countries, which increased economic rivalry with them and eventually became one of the causes of the war.
The Great Depression and Global Crisis
The Great Depression of 1929 in the United States, which quickly spread throughout the world, led to a wave of global protectionism, especially with the imposition of heavy tariffs in 1930 by US President Herbert Hoover, who imposed tariffs of 40% to 60% on 900 products to improve the industrial economic situation and agricultural produce within the United States. Stock prices in New York collapsed. Poverty is rampant. The acclaimed author John Steinbeck wrote a canonical immortal book called “Grapes of Wrath,” which described barren farmers who were thrown from their lands by greedy banks and turned into nomads.
From trade wars to World War II
Many countries responded by raising their own tariffs, which led to the collapse of international trade, unemployment, frustration, and a deepening of the economic crisis. Germany and Japan, which suffered from limited access to markets and resources, turned to a new policy of military expansion to secure economic resources and markets for themselves, which led directly to the outbreak of World War II.
Even before that, the increase in tariffs had hurt the southern states of the United States, which had been in a trend of reducing tariffs for years and had withdrawn from the Confederacy because they were dependent on world trade mainly for their cotton planters, who were based on slavery. Dependent on cotton exports and imports of European products, these countries saw the tariff hike as a fatal economic blow. Although slavery was the main cause of the Civil War, the protectionist policies of the Northern states contributed to tensions between the two sides and accelerated the outbreak of the war in 1861. The Americans did not learn from the wars of Napoleon, who tried to impose an embargo on British trade and thus protect the French economy. This led to pan-European resistance, including Tsarist Russia, Napoleon invaded Russia and eventually collapsed and was defeated.
Lessons from History
Although protectionism is designed to protect local economies, it often creates international tensions that can lead to military conflicts. Many wars broke out when countries felt that they were being economically harmed and saw war as a solution to ensure trade, investment, employment, and continued growth.
Trump’s trade tactics
The trade war that President Trump has reopened will not expand, the plan is not absolute, there will be changes back and forth. This is an economic tool of Trump to achieve political goals.
Trump, a shrewd businessman, is interested first and foremost in negotiating with countries that enjoy almost uninterrupted shipments of goods to the United States, with no reciprocity in terms of trade, and with NATO countries that do not pay for the world order under American hegemony, which is mainly a military burden that has fallen on the United States since the end of World War II.
The Marshall Plan initiated by the United States at the end of World War II to rebuild Europe has ended, the Americans say, and Europe must stand on its own two feet. Political, military, and market upheavals in the capital markets are all yet to come.
