History often offers valuable insights into what we might expect as global trade tensions escalate. While protectionist policies are often introduced with well-meaning intentions, they have sometimes resulted in unintended consequences. In this article, we will explore several key examples of protectionism and uncover critical lessons to help us investors navigate today’s increasingly fragmented trade landscape.

Smoot-Hawley Tariffs (1930s)

The Smoot-Hawley Tariff Act emerged during the early stages of the Great Depression as American policymakers sought to protect domestic industries from foreign competition. Signed into law by President Herbert Hoover on 17 June 1930, the legislation raised approximately 900 import tariffs by an average of 40% to 60%. The act aimed to shield American farmers, who constituted about 20% of the U.S. population and struggled with falling prices due to post-WWI European agricultural recovery. What happened next: Global retaliation: Trading partners like Canada and Europe retaliated with their tariffs, triggering...