Posted originally on Apr 9, 2025 by Martin Armstrong 

COMMENT: The media including the financial media really going crazy with this Trump Tariff thing – as if the market wasn’t due for a pull back.

DS

REPLY: We had forecast that we would see a correction by April last year. I answered plenty of questions on various podcasts about whether this would be a big crash and the end of the bull market. I consistently warned that such a scenario was absurd, for that implied the classic flight to quality being government debt. Facing a global sovereign debt crisis, I warned that it was just not realistic. The press has latched onto this normal correction and is deliberately trying to crash the market with constant claims that tariffs will destroy the world economy.

This is the very same political scheme they used in 1932 to blame tariffs on Hoover and the Republicans to win the 1932 election. It was a total lie and a fabrication of history. We are witnessing the attempted coup of Trump by deliberately trying to force the stock market down in a desperate attempt to turn the Republicans against Trump and stop his entire agenda of ending the Democrats’ feeding trough for corruption. I was stunned by the conversation I had yesterday and a deliberate media attempted coup.

Tariffs do not cause a DEPRESSION, no matter how much the media is selling that story now, just as the Democrats did in 1932 to get FDR elected. They also failed to protect any country from the effects of the worldwide depression at the time.

Between 1925 and 1929, there were 33 general revisions or substantial tariff changes, nearly all of which raised tariffs. These included 26 European nations and 17 republics of Latin America. In 1927 and 1928, Australia, Canada, and New Zealand increased and expanded the scope of their tariffs. In Asia, China, Persia, and Siam also raised tariffs during the period.
This was all before the 1929 Crash, which the history books omitted along with the 1931 Sovereign Defaults.

The Smoot-Hawley Tariff of 1930 was in response to the protectionism before 1929. During World War I, obviously, capital moved to the USA, as was the case for production, and also to Latin America. It was World War I that ended the sugar production that used to take place in Europe. It migrated to Java, Cuba, and other South American countries. You can see the huge spike in sugar during 1919/1920. After the war, the Europeans tried to bring back their economic dominance to recover their former glory. To try to achieve that, this was the start of the high tariffs that were really imposed against new competitors. That was the real essence of the trade war. Their high tariffs succeeded and brought sugar production back to Europe. The output during 1927-1928 was actually far greater than before the war in 1914.

The Europeans did the same with Cotton and wheat. This had the effect of creating overproduction, for which Europe lost export markets. This was the protectionist agenda that is rarely, if ever, explained beyond blaming the Smoot-Hawley Act.

There was a Tariff Reduction Bill of 1932, but this did not pass Congress. Here’s the breakdown:

1. Context: After the Smoot-Hawley Tariff Act (1930) raised tariffs to record levels, worsening the Great Depression, efforts were made to reverse this protectionist policy. By 1932, Democrats, who generally favored lower tariffs, controlled the House but not the Senate (which remained Republican until March 1933).
2. Legislative Efforts: Democratic lawmakers proposed tariff reduction bills in 1932, but they faced significant opposition. The Republican-controlled Senate and President Herbert Hoover, a protectionist, opposed lowering tariffs during an economic crisis.
3. Outcome: No major tariff reduction legislation was passed by both chambers of Congress in 1932. The pivotal shift came later with the Reciprocal Trade Agreements Act (1934) under President Franklin D. Roosevelt, which empowered the executive to negotiate tariff reductions.

In summary, despite the post-Smoot-Hawley backlash, the political landscape in 1932 prevented tariff reduction bills from passing Congress, as the Democrats were using this as an excuse to vote for FDR. The focus on austerity and revenue-raising measures (e.g., the Revenue Act of 1932) further sidelined such efforts.

The entire Tariff Issue of the 1930s was indeed just political. The Democrats used it to beat the Republicans over the head and pretended that the Tariffs caused the Great Depression. Today, we have the media, which hates Trump as they all tried so hard to defeat him, now they are deliberately blaming tariffs all over again for a normal correction that many kept call for a major crash before tariffs.