The ghost of Smoot-Hawley tells why America isn’t too big to avoid retaliation

Kris Mitchener, Kevin O’Rourke and Kirsten Wandschneider in this voxeu research:

The Trump administration’s pursuit of protectionist trade policies was predicated to some extent on the belief that America was too lucrative a market to face retaliation. Using the most detailed data set of bilateral trade flows constructed to date for the interwar period, this column shows that in fact the US faced substantial and widespread retaliation from trade partners in response to protectionist measures employed in the wake of the Great Depression. Exports to retaliating countries fell by as much as 33%.

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