By Emi Gruender
“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods,” said presidential candidate, now US President, Donald Trump on August 9, 2024. Despite these promises, among a plethora of many others to “make America affordable again,” the first four months of his presidency have yielded very different results. During his presidential candidacy, Trump frequently promised tariffs upon some of America’s biggest trading partners in an effort to lower the American cost of living. However, after his inauguration, the stock market has been in a steady downward spiral, costing investors millions of dollars as a result of the implementation of the previously mentioned tariffs. Many US stocks are in correction territory, on the verge of a “bear market:” or a market in which prices are falling, encouraging the selling of stocks. In yet another escalation of the trade war with China, Trump enacted the baseline tariff to 145%, raising the retail price for American consumers. China responded with a 125% tariff on all American goods, threatening if the price rises further, they will ignore it, since China cannot afford the prices of American goods as-is.
Given America’s long history with of tariffs, President Trump and his administration should have studied the historical effects of tariffs before injecting them into the already struggling American economy. According to 52% of voters in the most recent election, the economy was rated as an “extremely important” influence on their vote for presidents. This percentage is the highest it has ever been since October 2008, otherwise known as the “Great Recession.” With historical tariffs such as the Smoot-Hawley tariffs of 1930, the government enacted a series of tariffs aiming to fix prices and provide relief for the high prices of the Great Depression. However, these tariffs ultimately backfired, as the tariffed countries enacted tariffs of their own on American goods, which made it harder for American companies to sell their products internationally. As a result, America sank deeper into the Great Depression.
There are clear parallels between the failure of past tariffs and the current failure of current tariffs. Since President Trump has recognized the tariff’s effects on the sickly stock market, he has paused on these harsh policies, which has allowed the stock market to slowly crawl back to previous levels. However, if President Trump wants to “make America affordable again,” like his campaign promises, he should study the previous effects of US tariffs on the US economy, and properly inform his actions before exacerbating our current economic problems.