President Trump’s tariff-based reorganisation of the established global trade order is causing jitters not just in the money and bond markets, but across business as a whole – and AV isn’t immune, as a recent bulletin from Futuresource Consulting attests.
As ever, history’s lessons don’t appear to have been learned: anybody with access to Google can find out in seconds how the Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act, deepened the Great Depression following the Wall Street Crash of 1929. Indeed, many commentators opine that the Great Depression would likely have not occurred had the Tariff Act not been passed into law…
President Herbert Hoover signed the bill against the advice of many senior economists, yielding to pressure from his party and some business leaders. Sound familiar? Intended to bolster employment and manufacturing in the US, the tariffs instead deepened the Depression because America’s trading partners retaliated with tariffs of their own, leading to US exports and global trade plummeting. Again, sound familiar?
At least nearly 100 years on from what was clearly a huge economic policy misstep, some have learned history’s lessons – hence the reluctance by many countries not to retaliate to Trump’s trade war. Regardless, recession is certainly reported as a certainty if America’s self-appointed ‘king’ continues down this road, with the IMF warning of a $1trn hit to global output. Let’s at least hope that a depression can be avoided.
So what of our beloved industry? Well, one thing’s for sure, battening down the hatches is commercial suicide. We all know how it goes: as soon as there are serious headwinds, the financial helm is handed to the bean counters, with advertising the first to be tossed overboard. And this, of course, is in spite of business leaders being well aware of another salient lesson from history: brands that maintain or increase advertising spend in recessions often experience better long-term growth and market share – reportedly as much as 256 percent for spenders in the early 80s recession!
But don’t take my word for it: Google can tell you all you need to know!
