What Is Beggar-Thy-Neighbor?

The expression beggar-thy-neighbor refers to policies that a country enacts to benefit its economy that inevitably worsen the economic problems of other countries. The term comes from the policy's impact, as it makes a beggar out of its trading partners. 

Import tariffs, import𒅌 quotas, and currency devaluation are examples🌃 of policies intended to boost domestic economies regardless of their impact on trading partners.

Understanding Beggar-Thy-Neighbor

Beggar-thy-neighbor policies originated as a policy solution to domestic depression and high unemployment rates. The goal is to increase the demand for a nation's exports while reducing reliance on imports domestically.

Trade 澳洲幸运5官方开奖结果体彩网:protectionism is a type of economic policy that may negatively impact 🌱trading partners.

Such policies are meant to drive up consumption of domestic goods while reducing consumption of imports. This is usually achieved with the use of trade barriers such as tariffs, quotas, and 澳洲幸运5官方开奖结果体彩网:competitive devaluation of a national currency.

A currency war is a prime example of beggar-thy-neighbor in action. Also known as competitive devaluation, this involves a pattern of tit-for-tat policies in which one nation matches an abrupt national currency devaluation with its own devaluation, creatingꦯ a negative feedback loop.

Beggar-Thy-Neighbor: A Brief History

The term beggar-thy-neighbor is credited to the philosopher and economist Adam Smith, who used the term in "澳洲幸运5官方开奖结果体彩网:The Wealth of Nations", a 1776 critique of mercantilism and protectionist trade policies. Smith saw beggar-thy-neighbor strategies as misguided. He believed that 澳洲幸运5官方开奖结果体彩网:free trade would lea🔯d to long-term economic growth for all nations ♏involved.

Nevertheless, many countries have deployed 澳洲幸运5官方开奖结果体彩网:mercantilist and protectionist economic policies through the years. A number of countries enacted such policies during the 澳洲幸运5官方开奖结果体彩网:Great Depression, as did Japan after World War☂ II and🃏 China after the Cold War.

With the rise of globalization in the 1990s, beggar-thy-neighbor fell by the wayside—for the most part. Recently, though, protectionist policies have been making a comeback, as evidenced by President Donald Trump's "America First" campaign slogan.

As a first step in carrying out his America First promise in his second administration, President Trump imposed a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods, effective Feb. 4, 2025.

The Bottom Line

Beggar-thy-neighbor policies are protectionist trade measures taken to boost a nation's economy at the expense of its trade partners. Such policies were largely forgotten during the rise of globalization beginning in the 1990s. Now they're making a comeback, as evidenced by President Donald Trump's "America First" tariffs.