### As the US toughens up its negotiating stance on trade, it seems that ghosts from the Great Depression haunt the land

http://www.chinadaily.com.cn/opinion/images/attachement/jpg/site1/20170919/b083fe955fbe1b2aa11012.jpg
[Image Credit](http://www.chinadaily.com.cn/opinion/images/attachement/jpg/site1/20170919/b083fe955fbe1b2aa11012.jpg)

### Consider the following

Europe’s financial system is incredibly cosseted. 

 **The big loser is the local saver.**

### In the US, regulatory protectionism has seen the courts grab jurisdiction over US dollar deals made worldwide. 

**Until a case is resolved, foreign institutions that contest rulings may be excluded from the US financial system.** 

### Then there is China, which long protected its markets using financial repression

This kept its currency undervalued and helped build up foreign exchange reserves. 

China now seems to think it has enough roads, bridges and reserves and is moving in the opposite direction.

### Protectionism can be simply thought of as state-directed action to change the price of production at home compared with abroad

What the examples above from the world’s big economic regions show is an extraordinary effort over 20 years to change relative prices. 

### Compared to the sins of recent decades, I do not find the likely US measures especially egregious.

**Remember that when the Smoot-Hawley tariff was passed in 1930, impacting more than 20,000 imported goods, the US was running a huge current account surplus.** 

Trump’s protectionist measures look tame compared to previous insanities. 

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