Sir Vince Cable has echoed the recent opinion of leading Chinese businessman Jack Ma that "if trade stops, war starts" as he drew worrying comparisons between the current economic and political climate and the situation that existed in the lead-up to World War II.
Cable, who was Britain's Business Secretary between 2010 and 2015, told Business Insider that "there are some terrific parallels between what is happening today and what happened in 1933-34."
"I know history never repeats itself but you had the financial crisis in 1929," he explained. "There was a time lag of about four or five years, then you got Smoot-Hawley tariff measures, the British responded with Imperial preference, Mussolini responded, and it just escalated. That was one of the things that fed into the conflict [of World War II].
The Smoot-Hawley tariffs Cable referred to massively raised import taxes on hundreds of US goods back in 1930, an isolationist policy that chimes with incumbent US President Donald Trump's protectionist agenda and, more specifically, his pledge to impose tariffs on goods from China and Mexico.
President-elect Donald Trump stands with Alibaba Executive Chairman Jack Ma as they walk to speak with reporters after a meeting at Trump Tower in New York, Monday, Jan. 9, 2017. (AP Photo/Evan Vucci)
Cable called the prospect of a trade war between the US and China "enormously serious".
Reflecting on how Trump's new National Trade Council head Peter Navarro accused Germany of currency manipulation last month, he said:
"If the two blocks of Western countries – the US and the EU – are at economic war, then we are really in trouble."
Last month, Alibaba founder Jack Ma issued his own warning. At the annual meeting of the General Association of Zhejiang Entrepreneurs, his Hong Kong-based South China Morning Post quoted him as saying that "if [current conflicts] were not dealt with properly, they might lead to a relatively big trade war which is not a good thing for China, the US or the world economy".
Ma also opined that Trump should not be underestimated:
"It is only that his speaking style and the way he does things are different from what we are used to expecting from politicians.
"He saw the many problems existing now in the US and he hopes to solve them in a different way. He is a businessman, a man of action and result-oriented."
