Anglo-Irish Trade War

The Anglo-Irish Trade War (also called the Economic War) was a retaliatory trade war between the Irish Free State and the United Kingdom from 1932 to 1938. The Irish Government refused to continue reimbursing Britain with land annuities from financial loans granted to Irish tenant farmers to enable them to purchase lands under the Irish Land Acts in the late nineteenth century, a provision which had been part of the 1921 Anglo-Irish Treaty. This resulted in the imposition of unilateral trade restrictions by both countries, causing severe damage to the Irish economy.

The "war" had two main aspects:

On taking over power and coming into office in 1932, the new Fianna Fáil government under Éamon de Valera embarked upon a protectionist policy in economic dealings, and tariffs were introduced for a wide range of imported goods, mainly from Britain, the Free State's largest trading partner by far. This was thought necessary to develop native industry, move away from over-dependence on Britain, as well as its failure to develop industrially under free market conditions. It was also to compensate for the drastic fall in demand for Irish agricultural products on international markets, due to the Great Depression which had begun in 1929. Other means had also to be found to help the disastrously undermined balance of trade and the mounting national debt. A vigorous campaign was set in motion to make the Free State agriculturally and industrially self-sufficient by the then Minister for Industry and Commerce, Seán Lemass. Every effort was taken to add to the measures brought in by the previous government to boost tillage farming and industry and to encourage the population to avoid British imports and "Buy Irish Goods".

The government sought to go further and end the repayment to Britain of land annuities. These originated from the government loans granted to Irish tenant farmers by the Land Commission from the 1880s, which had enabled them purchase lands from their former landlords, under the Irish Land Acts. In 1923, the previous W. T. Cosgrave government had assured Britain that the Free State would honour its debts and hand over the land annuities and other financial liabilities. Under the 1925 London Agreement, the Free State was relieved from its treaty obligation to pay its share towards the public debt of the United Kingdom. The Free State's liability to supervise and pass on land annuities payments led to controversy and debate on whether they were private or public debts. In 1932, de Valera interpreted that the annuities were part of the public debt from which the Free State had been exempted, and decided that the State would no longer pay them to Britain. His government passed the Land Act of 1933 that allowed the money to be spent on local government projects.

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