Has there ever been such a thing as a "trade war"?

[eridani]

http://www.truthout.org/the-mythical-concept-trade-war58440

As Americans ponder how to get the US out of its current trade mess, we are constantly warned to do nothing - like impose a tariff to neutralize Chinese currency manipulation - that would trigger a "trade war." Supposedly, no matter how bad our problems with our trading partners get, they are less bad than the spiraling catastrophe that would ensue if we walked a single inch away from our current policy of unilateral free trade.

But the curious thing about the concept of trade war is that, unlike an actual shooting war, it has no historical precedent. In fact, the reality is that there has never been a significant trade war, "significant" in the sense of having done serious economic damage. All history records are minor skirmishes at best.

The standard example free traders give is that America's Smoot-Hawley Tariff of 1930 either caused the Great Depression or made it spread around the world. But this canard does not survive serious examination and has actually been denied by almost every economist who has actually researched the question in depth - a group ranging from Paul Krugman on the left to Milton Friedman on the right.

The Depression's cause was monetary. The Fed allowed the money supply to balloon during the late 1920s, piling up in the stock market as a bubble. It then panicked, miscalculated and let it collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. Trade had nothing to do with it.

As for the charge that Smoot caused the Depression to spread worldwide: it was too small a change to have plausibly so large an effect. For a start, it only applied to about one-third of America's trade: about 1.3 percent of our GDP. Our average tariff on dutiable goods went from 44.6 to 53.2 percent - not a terribly big jump. Tariffs were higher in almost every year from 1821 to 1914. Our tariff went up in 1861, 1864, 1890 and 1922 without producing global depressions, and the recessions

[Hannah Bell]

1. Aren't most wars trade wars, in some sense or another?

[zeemike]

2. If there is a trade war it is all just for show.

Globalization was all about the big fish of this world gobbling up the little fish....it served as a tool for the ruling class to consolidate their power around the world.
At least that is how I see it.

[roamer65]

3. The GD's roots do, in fact, lie in the currency manipulations engaged in by...

then NY Fed President Benjamin Strong and Bank of England Governor Montagu Norman. They were very close personal friends, vacationed together and quite often collaborated to manipulate the faltering British pound's value in the 1920's. Strong's allegiances belonged more to Britain than America.

Strong is the one who the cut in the fed funds rate on Aug 5th, 1927 from 4% to 3.5%. This cut was like pouring gasoline on a raging fire, in regards to stock prices.