Donald Trump’s decision to increase reciprocal import tariffs on hundreds of countries, including Indonesia, has triggered retaliatory attacks from affected countries. In response, they have also imposed high tariffs on imports from the U.S. For example, China has imposed a 34% tariff on U.S. goods.
This kind of event leading to a trade war can trigger economic instability and international political tensions. A similar situation occurred in the 1930s when the U.S. implemented policies to increase import tariffs that led to an ‘open warfare hellgate’.
The cause of this can be traced back to the instability that occurred at the end of 1929. In October 1929, the New York Stock Exchange experienced a crash. The U.S. and many other countries experienced a decrease in purchasing power, industrial decline, and increased unemployment.
Citing Britannica, this situation prompted the U.S. government to adopt protectionist policies, one of which was through an increase in import tariffs. On June 17, 1930, the U.S. government issued the Smoot-Hawley Acts, named after two senators.
These regulations subjected more than 20,000 foreign goods that were previously easily imported to higher import tariffs of up to 40%. The U.S. government argued that the rules were made to protect U.S. citizens and industries from the economic crisis.
However, from a global perspective, the U.S. policy exacerbated the economic crisis. Many countries could not export, leading to a domino effect of sluggish industries and rising unemployment. In Europe, a country significantly affected was Germany.
Since the 1920s, Germany had been very unlucky. The defeat in World War I (1914-1918) made the country experience economic difficulties. Germany had to spend a lot of money to pay war reparations, finance war damages, and revitalize industries.
When the situation became conducive, Germany faced another setback. Its industries again stagnated due to the high import tariffs imposed by the U.S., which was the main market for German products. As a result, the country fell into an economic crisis, causing unemployment, poverty, and increased criminality.
In the midst of these conditions, a mustached man named Adolf Hitler emerged, proposing solutions to the economic crisis to thousands of German citizens. Through his impressive speeches he managed to captivate them.
To cut the story short, in 1933, he successfully became the leader of his party, which later changed its name to the National Socialist German Workers’ Party (NSDAP or Nazi). Hitler gradually rose to become Chancellor of Germany with the ambition to control Europe.
With the world’s main focus on economic recovery at that time, attention on defense and peace diminished. From there, Hitler’s actions became smoother. In 1939, he launched a surprise attack on Poland, starting World War II on a scale previously unimaginable.
The world underwent a transformation that began not only from political issues but also economic ones, including import tariff increases and trade wars by the U.S.
