The Economic Fault Line: How High Tariffs Helped Set the Stage for World War II
As history reveals, Trump's proposed high tariffs could lead to a similar outcome.
The Economic Fault Line: How High Tariffs Helped Set the Stage for World War II
The Second World War, often seen through the lens of military aggression and geopolitical maneuvers, was also shaped by subtler economic forces. Among these, high tariffs during the early 20th century contributed significantly to the conditions that led to the global conflict. While it would be simplistic to claim that protectionism alone ignited the war, tariffs played an undeniable role in exacerbating the global economic crisis, fostering the rise of nationalist regimes, and deepening the divides between nations. The collapse of international trade, largely driven by these protectionist policies, helped create an atmosphere of desperation and aggression that ultimately spilled over into war.
Smoot-Hawley and the Fracturing of Global Trade
In 1930, as the world was reeling from the 1929 stock market crash, the United States enacted one of the most infamous economic policies of the 20th century: the Smoot-Hawley Tariff Act. The act, designed to protect American industries from foreign competition, dramatically raised tariffs on more than 20,000 imported goods. Proponents of the tariff believed that shielding domestic industries would stimulate American manufacturing and alleviate the nation’s rising unemployment.
The consequences, however, were catastrophic—not only for the U.S. but for the global economy. In response, other countries imposed tariffs, leading to a sharp contraction in international trade. Nations that had depended on exports to fuel their economies found themselves crippled by the collapse of global commerce. In a matter of months, the world economy spiraled more profoundly into the Great Depression. What began as an economic crisis became a political and social, fueling unrest and extremism across much of the world.
Economic Nationalism and the Rise of Fascism
The global economic collapse fostered by these tariffs contributed to a broader shift toward economic nationalism. With international trade in decline, many nations turned inward, erecting barriers to foreign competition and focusing on domestic production. This retrenchment did little to alleviate the crisis. Instead, it stoked nationalism and isolationism. The notion that each country should prioritize its own economic survival—at the expense of global cooperation—became politically expedient in the face of widespread poverty and unemployment.
In Germany, this economic nationalism found its most dangerous expression. The fragile Weimar Republic, already burdened by the heavy reparations imposed by the Treaty of Versailles, faced economic devastation as tariffs cut off access to global markets. Unemployment soared, and inflation destabilized the German economy. It was in this context that the Nazi Party, led by Adolf Hitler, rose to power. Hitler capitalized on the widespread economic despair, pointing to tariffs, reparations, and foreign powers as the cause of Germany’s plight. His solution? A radical nationalism that promised to restore German glory through territorial expansion and the rejection of international norms.
The parallels in Japan were striking. While less discussed in Western histories of the war, Japan’s dependence on international trade meant that the global economic downturn hit the nation particularly hard. As exports plummeted, Japan’s political elite turned to a more aggressive form of nationalism. The militarists who took control of the government in the 1930s believed that Japan’s future prosperity lay in acquiring territory and resources. Unable to access global markets, Japan sought to create a self-sufficient empire through conquest—beginning with the invasion of Manchuria in 1931.
Destabilizing Democracies, Enabling Dictatorships
The economic dislocations caused by high tariffs did more than destabilize individual economies—they undermined the foundations of democracy itself. In the United States, tariffs like Smoot-Hawley deepened the Depression, leading to widespread dissatisfaction with the political status quo. In Europe and Asia, however, the effects were even more profound. As economic conditions worsened, many citizens lost faith in democratic institutions. The allure of authoritarian solutions—embodied by Hitler, Mussolini, and Japanese militarists—became stronger as the economic crisis dragged on with no end in sight.
Authoritarian leaders across Europe and Asia exploited the economic chaos to consolidate power, using nationalist rhetoric and promises of economic revival to justify their aggressive and expansionist agendas. In this way, the economic nationalism intended to protect domestic industries instead laid the groundwork for the rise of totalitarian regimes, which ultimately pursued war to achieve their nationalistic and imperial ambitions.
The Collapse of International Cooperation
The most far-reaching consequence of the high tariffs of the 1930s was the collapse of international cooperation. In the aftermath of World War I, there had been a concerted effort to build institutions—like the League of Nations—that could manage international disputes and foster collaboration between nations. But as the global economy faltered, these efforts unraveled. Countries turned inward, focusing on domestic recovery at the expense of international solidarity.
The contraction of global trade, fueled by tariffs, deepened these divides. Diplomatic relations became more strained, and the cooperative spirit of the postwar years was replaced by suspicion and antagonism. The League of Nations, already weak, was rendered impotent in the face of this growing nationalism. When authoritarian regimes in Germany, Italy, and Japan began pursuing aggressive expansion, there was little appetite—or ability—among the world’s democracies to stop them.
The Tariff’s Silent Role in War
It is tempting to view World War II solely as a clash of ideologies—democracy versus fascism, freedom versus tyranny. However, the economic underpinnings of the conflict must not be overlooked. The high tariffs of the 1930s, particularly the Smoot-Hawley Act, were part of a broader pattern of economic dislocation that helped fuel the rise of authoritarian regimes and undermine international cooperation. By deepening the Great Depression and fostering economic nationalism, these tariffs helped create the conditions that led to the most devastating conflict in human history.
Today, as the world grapples with questions of trade, protectionism, and economic nationalism, it is worth remembering the lessons of the 1930s. The collapse of global cooperation did not just lead to financial hardship—it led to war. High tariffs, intended to protect, contributed to destroying the international order. Understanding this dynamic is crucial as we navigate the complexities of our era, where economic decisions still have the power to shape history.
—Ron Starbuck, Publisher
Saint Julian Press, Inc.
Houston, Texas
Saint Julian Press. 2024. The Economic Fault Line: How High Tariffs Helped Set the Stage for World War II.Saint Julian Press.
The Open AI - ChatGPT Plus service was used to research information and resources for this essay.
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