TALKING POINTS – Trump, Trade Wars, Tariffs, Chicken War
- Trump tariffs pose aserious risk to global growth and stability
- Chicken War of 1960’s is a lesson about the danger of trade wars
- Risk-friendly assets, global markets vulnerable to volatile swings
Protectionist policies adopted by the administration of US President Donald Trump have created a trade war with China and caused significant volatility in the market. The outlook for future growth and multilateral trade relations appear bleak. Historically, protectionism and tariffs have produced political and economic instability and reduced global wealth by a substantial margin.
From 1961-1964, the EU and US engaged in a trading conflict that later came to be known – albeit comically – as the Chicken War. The retaliatory nature of the conflict is mirrored in the recent trade wars the White House has ignited. The economic conflict back then triggered market volatility and ended up implementing an auto tariff in the US that remains to this day.
THE CHICKEN WAR
In both Europe and the US, chicken was largely considered a delicacy. However, after the Second World War, the US switched to factory farming chickens and flooded the market with cheap poultry. North-American chicken consumption in West Germany alone increased by 23%.
This caused a depression in chicken prices, ruffling Europe’s feathers. In 1961, France, West Germany and several European states imposed tariffs and price controls on US-imported chicken. US poultry exporters’ sales fell 25%, amounting to losses of around $210 million (in 2014 dollars).
Chicken Trade Wars
