China’s ambassador to the United States Xie Feng has said that the United States should avoid the mistakes from the Great Depression of the 1930s amid the escalating tariff war between the two countries.
Xie was speaking at a Traditional Chinese Medicine open-day event at the embassy in Washington, but he drew on ancient lore as a metaphor for the current trade dispute.
He cited the philosophy of addressing causes rather than just symptoms, calling for joint efforts to grow the global economy rather than fighting over the existing spoils.
“You can’t just treat a headache by just focusing on the head or foot pain by only targeting the feet,” Xie said. “And you certainly shouldn’t prescribe medicine to others when you’re the one who’s sick.”
More specifically, he cited the lessons from US protectionist policies – including the tariff-heavy Smoot-Hawley Act, which is widely accepted to have worsened the Great Depression and is now used as cautionary tale by economic historians.
“The lesson of the Smoot-Hawley Act is still fresh today,” Xie said.
The Act was designed to protect US agriculture and manufacturing and imposed tariffs of between 59 and 75 per cent on some imported goods such as car parts and wool, but it led to a dramatic fall in global trade that helped prolong the Great Depression.
