Over 1,100 economists warn Trump against repeat of 1930s

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1,143 world-renowned economists, including 15 Nobel laureates, have signed a letter warning US President Donald Trump his protectionist policies risk leading the US towards the same devastating mistakes made in the 1930s.

The letter, sent to the president on Thursday, came on the 88th anniversary of a similar written warning sent to Congress by 1,028 economists in 1930, calling on the then government to reject protectionist policies which ultimately led to the Great Depression.

Addressing Trump, the 1,143 economists warn the president “Congress did not take economists’ advice in 1930, and Americans across the country paid the price."

Richard Thaler, the most recent recipient of the Nobel Memorial Prize for Economic Sciences, was one of the 1,143 signatures on the letter. /VCG Photo

“Much has changed since 1930 – for example, trade is now significantly more important to our economy – but the fundamental economic principles as explained at the time have not.”

Along with Nobel Prize winners like Richard Thaler and James Heckman, the letter was also signed by former presidential advisers to Barack Obama, George W Bush and Ronald Reagan. Underlining the importance of free trade and globalization, the letter coincides not only with the anniversary of the 1930 letter, but also the current US trade delegation’s visit to Beijing.

On trade, the economists warn that “countries cannot permanently buy from us unless they are permitted to sell to us,” before going on to highlight how implementing tariffs on foreign goods would mean American workers in construction, agriculture, transportation, retail, banks, hotels and utilities would “clearly lose.”

The letter, organized by the US National Taxpayers Union (NTU), goes on to say tariffs would hurt “the great majority of our citizens,” and “few people could hope to gain from such a change.”

Speaking to Bloomberg, the director of the NTU’s free-trade initiative Brian Riley says “economists are pretty united in their opposition to protectionist trade policy. It’s the economic equivalent of flat-earth trade policy.”

The NTU, which has 362,000 members, has previously backed Trump over his attempts to repeal Obamacare and last year’s tax reform bill. However, it warned earlier in March that Washington should rethink its decision to implement steel and aluminum tariffs, saying “new trade taxes would run counter to President Trump’s efforts to attract new job-creating investment in the United States.”

This is not the first letter warning against Trump’s economic policies – prior to the 2016 election, 370 economists including eight Nobel laureates wrote an open letter calling Trump “a dangerous, destructive choice for the country. He misinforms the electorate, degrades trust in public institutions with conspiracy theories, and promotes willful delusion over engagement with reality.”