On the face of it, Donald Trump’s threat to impose general import tariffs of 10 to 20 per cent on all goods – and much higher levies on those from China – is bad news for Britain, the US and the world. That protectionism makes us poorer is a lesson which seems to have to be re-learned every generation.
The last time America was forced to learn the hard way was when George W Bush tried to protect the US steel industry with punitive tariffs on imports of steel in 2002. A US government review later concluded that the tariffs had cost 200,000 jobs in US by increasing the prices of raw materials for manufacturers – which was more than the 190,000 people employed in the entire US steel industry at the time.
Keir Starmer’s government should lose no time in pressing to reopen trade negotiations
But do we really need to be quite so worried, and see it as a return to the 1930s when governments attempted to get themselves out of the Great Depression by shutting out imports? Perhaps not.