Canada Struck Back (Philippians 2:4)

American farmers were struggling. Foreign products were competing with American goods, and many believed other countries enjoyed access to the American market while keeping American products out of theirs. The proposed solution seemed reasonable. Raise tariffs, make foreign goods more expensive, and encourage Americans to buy American. This would protect domestic industries and save American jobs. Canada responded by raising tariffs on American products. Other countries prepared to do the same. Each nation claimed that it was only defending its own workers and economic interests.

This sounds like the current trade war between the United States and Canada. But it happened in 1930.

The legislation was the Smoot–Hawley Tariff Act, signed by President Herbert Hoover on June 17, 1930.

It began as an effort to help American farmers, many of whom had struggled throughout the otherwise prosperous 1920s. As the bill moved through Congress, other industries asked for protection. The final law raised tariffs on thousands of agricultural and manufactured products.

The problem was real. American farmers were suffering, and some countries maintained barriers against American goods. Supporters believed the United States was allowing foreign producers to benefit from the American market without receiving equal treatment in return.

More than a thousand economists asked Hoover to veto the bill. They warned that other countries would retaliate and that American farmers and manufacturers would lose foreign customers. Hoover signed it anyway.

Canada was among the first countries to strike back. It placed new tariffs on American products and strengthened its trading relationships with other countries. Other nations raised barriers, organized boycotts, or found new suppliers.

American tariffs made foreign goods more difficult to sell in the United States. Retaliatory tariffs made American goods more difficult to sell overseas. From 1929 to 1933, American exports fell from approximately $5.4 billion to $2.1 billion. Countries that formally retaliated against Smoot–Hawley reduced their purchases from the United States by an estimated 28 to 32 percent.

American farmers who had asked for protection lost customers. Manufacturers that depended on imported materials faced higher costs. Exporters watched foreign markets close. Smoot–Hawley did not cause the Great Depression. The economic collapse had already begun, and banking failures, monetary contraction, debt, and falling demand were more important causes. However, the tariff war made the crisis worse by further restricting trade when the world economy was already in serious trouble. By 1934, the United States had begun reversing course and negotiating agreements to reduce tariffs. 

Nearly a century later, America and Canada are exchanging tariffs again. President Trump argues that Canada has been taking advantage of the United States for years. Some of his complaints are legitimate. Canada closely protects its dairy, poultry, and egg industries. Once certain quotas are exceeded, American cheese and butter can face extraordinarily high tariffs. American businesses have also objected to Canadian restrictions involving agriculture, government contracts, automobiles, alcohol, pharmaceuticals, and digital services.

These are real trade disputes. Countries should be able to challenge unfair practices. Tariffs may sometimes be useful in protecting industries important to national security or gaining leverage during negotiations. However, a trade deficit does not automatically mean that one country is cheating another.

The United States imports more goods from Canada than it exports there, but much of that difference comes from energy. America buys large quantities of Canadian crude oil, natural gas, and electricity because American consumers and industries need them. The United States also sells more services to Canada than it purchases from Canada. The concern, therefore, is not that America wants to protect its own interests. Every government has a responsibility to protect its people. The concern is what happens when one interest is protected without adequately considering who else may pay.

A tariff may help an American steel producer while increasing costs for an American manufacturer that uses steel. It may protect one farmer while causing another to lose Canadian customers. Some of the expense may eventually be passed on to American consumers. Canada then responds with tariffs of its own. American exporters lose sales, and pressure builds for the United States to answer again. Once the cycle begins, neither government wants to appear weak by backing down. Protection itself is not the problem. The problem comes when our field of vision becomes so narrow that we see only what we are defending and not what our defense may damage.

This can happen in our personal lives as well. When someone hurts us, our first instinct is often to protect ourselves. The injury may be real. Trust may have been broken, and boundaries may be necessary. But self-protection can gradually become a wall. We stop speaking honestly because honesty might make us vulnerable. We keep our distance so that we cannot be hurt again. We become determined to prove that we were right, even if winning the argument causes us to lose the relationship. The other person responds by building a wall of his own. Before long, two people who once cared for each other are separated by defenses that each believes are necessary.

Paul wrote:

Let each of you look not only to his own interests, but also to the interests of others.
Philippians 2:4 (ESV)

Notice that Paul did not say we have no right to consider our own interests. He said that our interests should not be the only ones we consider. That is a much harder standard. It requires us to ask not only whether we have been wronged, but whether our response is wise. It asks us to consider how our attempt to protect ourselves may affect our spouse, children, friends, coworkers, or church.

God does not ask us to deny real injuries or remain in dangerous situations. Looking to the interests of others does not eliminate justice, accountability, or appropriate boundaries. It does prevent our own pain from becoming the only factor guiding our response.

The people who supported Smoot–Hawley were not necessarily motivated by evil. Many sincerely wanted to save American farms, businesses, and jobs. Yet their protection produced costs they did not anticipate, including costs borne by some of the people they hoped to help.

We cannot know whether the present conflict with Canada will follow the same course. The circumstances are different, and not every tariff produces the same result. Still, history gives us reason to look beyond our immediate interests. Before building another barrier, imposing another cost, or striking back, we should consider what our protection may cost someone else.

That applies to nations.

It also applies to us.

Love and trust the Lord; seek His will in your life.

#faith #trustinggod #christianity #jesuschrist #bible #seekinggodswill #truth #sanctification #godisincontrol #godhearsourprayers #salvation #providenceofGod #canadastruckback #smooth-hawley #tarrifs #philippians2:4

YouTube@theBereansblog