Smoot-Hawley Act

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The Smoot-Hawley Tariff Act was enacted by Congress in 1930 to address some of the problems of the Great Depression. The Act hiked tariffs on more than 20,000 imported goods. Other countries reciprocated by raising import taxes.

President Hoover signed Smoot-Hawley into law on June 17, 1930.

The act was pioneered by Senator Reed Smoot, a Republican from Utah, and Representative Willis C. Hawley, a Republican from Oregon.

Scholars disagree over how much protection the tariff actually afforded and whether the tariff provoked a wave of foreign retaliation that made the Great Depression even worse. But Smoot-Hawley did nothing to foster cooperation among nations during a difficult time for international relations, and that the adoption of such policies contributed to a drastic contraction of international trade.

For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934.

Smoot-Hawley was the last gasp for high tariffs in 20th century American trade policy. Beginning with the 1934 Reciprocal Trade Agreements Act, the United States generally sought trade liberalization through bilateral or multilateral tariff reductions.[1]

References

  1. Protectionism in the Interwar Period. U.S. Department of State.