“Cynics were delighted at the spectacle of a country trying to collect debts from abroad and, at the same time, shutting out the import goods that could alone have provided the payment for those debts.”

Paul A. Samuelson wrote this in his widely read textbook “Economics”, published in 1948, at a time when memories of the devastating impact of the Smoot-Hawley Tariff Act of 1930 on global trade were still fresh. Created to protect US farmers and businesses from foreign competitors, the act increased tariffs on foreign imports to the US by about 20 per cent. Over 25 countries responded by increasing their own tariffs on American goods.

International trade plummeted drastically, resulting in a worldwide decline of 66pc between 1929 and 1934, contributing to the ill effects of the Great Depression. Both US exports and imports dropped substantially.

Almost a century later, President Donald Trump has slapped much steeper import taxes of up to 50pc — this includes a 10pc baseline across-the-board tariff on all foreign countries that came into effect last week — on 60 US trading partners to reduce America’s trade deficit and bring back manufacturing jobs by strong-arming the trading partners.

Most experts insist that the outcome of Trump’s vicious trade war would be much more disruptive and damaging for the........

© Dawn Business