The Iconic Lesson from Ferris Bueller and the Looming Economic Storm
The iconic scene from the 1986 film Ferris Bueller’s Day Off has resurfaced on social media, sparking a timely debate about the potential consequences of U.S. President Donald Trump’s tariffs on Canada and Mexico. In the clip, a monotone high school teacher lectures a disengaged class about the infamous Smoot-Hawley Tariff Act of 1930, drawing eerie parallels to today’s trade policies. The question on everyone’s mind? Could history repeat itself, plunging North America into economic turmoil?
A Blast from the Past: The Smoot-Hawley Tariff Act
The Smoot-Hawley Tariff Act, signed into law by President Herbert Hoover in 1930, was designed to protect American industries by sharply increasing tariffs on imported goods. However, it backfired disastrously. Amidst the Great Depression, the law worsened economic conditions by sparking retaliatory tariffs from U.S. trading partners, deepening the global downturn. The act is widely regarded as one of the most misguided economic policies of the 20th century, contributing to widespread unemployment and prolonging the Depression.
The Historical Impact of Protectionism
Economists and historians agree that Smoot-Hawley was a catastrophic move. Over 1,000 economists warned Hoover against signing the bill, predicting it would provoke international trade wars. Their warnings were ignored, and the consequences were dire. Canada and other nations retaliated with their own tariffs, leading to a sharp decline in global trade. The U.S. Senate’s historical records reveal that the public’s backlash against Smoot-Hawley was so intense that both Senator Reed Smoot and Representative Willis Hawley, the architects of the bill, were voted out of office in 1932.
Trump’s Tariffs and the Canadian Connection
Fast-forward to 2025, and history seems to be echoing itself. Trump’s tariffs, imposed on Canada and Mexico, have sent shockwaves through the North American economy. Canada, in particular, is heavily affected due to its deep trade ties with the U.S., which accounts for 77% of Canadian exports. Economists warn that these tariffs represent the largest trade shock since the Smoot-Hawley era, with the average U.S. import tariff rate quadrupling to nearly 12%.
The Economic Fallout: Recession Looms
The repercussions of Trump’s tariffs are already being felt. Experts predict that if the tariffs remain in place, a recession could hit within six months. Canada’s manufacturing sector, particularly in Ontario and Quebec, is expected to bear the brunt of the impact. Michael Dobner of PwC Canada warns that businesses must prepare for supply chain disruptions and explore new markets to mitigate the damage. Meanwhile, U.S. consumers are bracing for higher prices, with inflation projected to exceed 3% by the end of 2025.
A Long and Winding Road to Recovery
While economists acknowledge that supply chains will eventually adapt and find new trading partners, the short-term pain will be significant. BMO chief economist Doug Porter estimates that Canada’s GDP growth could drop to a paltry 0.5% in 2025, with unemployment potentially rising to 8%. Even if the tariffs are eventually lifted, the scars on the economy will take years to heal. As Tu Nguyen of RSM Canada aptly puts it, “You can’t reroute supply chains and find new customers overnight.”
The eerie parallels between the Smoot-Hawley Tariff Act and Trump’s current policies serve as a stark reminder of the dangers of protectionism. Ferris Bueller’s iconic question—“Did it work? Anyone? Anyone?”—echoes through the ages, urging us to learn from history before it’s too late.
