Smoot-Hawley Tariff Act

Definition

The Smoot-Hawley Tariff Act was a protectionist trade policy enacted in the United States in 1930, which significantly raised tariffs on a wide range of imported goods. This legislation was intended to protect American industries and jobs during the economic downturn of the Great Depression, but it ultimately had the opposite effect, contributing to the deepening of the global economic crisis.

5 Must Know Facts For Your Next Test

1. The Smoot-Hawley Tariff Act raised tariffs on over 20,000 imported goods, with some tariffs reaching as high as 60%.
2. The act was intended to protect American industries and jobs during the Great Depression, but it ultimately led to retaliatory tariffs from other countries, which reduced international trade and exacerbated the economic downturn.
3. The Smoot-Hawley Tariff Act was a significant factor in the collapse of world trade during the Great Depression, as it triggered a series of tit-for-tat tariff increases between the United States and its trading partners.
4. The act was opposed by many economists and political leaders at the time, who warned that it would harm the global economy and lead to a trade war.
5. The Smoot-Hawley Tariff Act is widely regarded as one of the most significant policy mistakes of the Hoover administration, contributing to the depth and duration of the Great Depression.

Review Questions

• Explain how the Smoot-Hawley Tariff Act was a response to President Hoover's efforts to address the Great Depression.
  • The Smoot-Hawley Tariff Act was a key part of President Hoover's response to the Great Depression. Hoover believed that raising tariffs on imported goods would protect American industries and jobs, which he saw as crucial for economic recovery. However, the act ultimately backfired, as it led to retaliatory tariffs from other countries, reducing international trade and exacerbating the economic downturn. The Smoot-Hawley Tariff Act is now widely regarded as one of the most significant policy mistakes of the Hoover administration, contributing to the depth and duration of the Great Depression.
• Analyze the impact of the Smoot-Hawley Tariff Act on the depths of the Great Depression.
  • The Smoot-Hawley Tariff Act had a significant negative impact on the depths of the Great Depression. By raising tariffs on a wide range of imported goods, the act triggered a trade war, with other countries retaliating by raising their own tariffs on American exports. This reduction in international trade further weakened the global economy, leading to a collapse in world trade and contributing to the prolonged economic downturn. The act was widely criticized by economists and political leaders at the time, who warned that it would harm the global economy, and it is now seen as one of the most significant policy mistakes of the Hoover administration.
• Evaluate the role of the Smoot-Hawley Tariff Act in shaping the public's perception of the Hoover administration's handling of the Great Depression.
  • The Smoot-Hawley Tariff Act played a significant role in shaping the public's perception of the Hoover administration's handling of the Great Depression. The act, which was intended to protect American industries and jobs, ultimately backfired and contributed to the deepening of the economic crisis. This policy failure, combined with Hoover's other unsuccessful attempts to address the Great Depression, such as his reluctance to provide direct relief to the unemployed, led to a growing public dissatisfaction with the administration's response to the crisis. The Smoot-Hawley Tariff Act became a symbol of the Hoover administration's inability to effectively manage the economic challenges facing the country, and it contributed to the public's desire for a new approach, which would ultimately be provided by the incoming Roosevelt administration and the New Deal.

Related terms

Protectionism: An economic policy of restricting or regulating trade between nations in order to protect domestic industries and jobs.

Tariff: A tax or duty imposed on imported goods, typically to protect domestic industries from foreign competition.

Trade War: A situation in which countries raise or create tariffs or other trade barriers against each other in retaliation, often to protect domestic industries.