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Quotation of the Day…

… is from page 255 of Jeffry Frieden’s 2006 book, Global Capitalism:

The experience of U.S. egg producers in the 1930s is revealing, a specific example of how domestic tariffs often spark retaliation by other governments and, as a consequence, backfires in the domestic economy.

Smoot-Hawley raised the tariff on egg imports into the U.S. from eight cents to ten cents per dozen. This higher tariff caused egg imports from Canada to fall by 40 percent.  In response, Canadian authorities increased the tariff on U.S. eggs exported to Canada; this tariff went from three cents per dozen to ten cents per dozen.  The result was that American egg exports to Canada fell by 98 percent – from 11 million annually just before Smoot-Hawley to a mere 200,000.