| Long title | An Act To provide revenue, to regulate c ... |
| Nicknames | Smoot–Hawley Tariff, Hawley–Smoot Tariff |
| Enacted by | the 71st United States Congress |
| Effective | March 13, 1930 |
What was the hawlkey Smoot Tariff Act?
The Tariff Act of 1930 (know as the Smoot–Hawley Tariff ) was “protectionist” trade legislation signed into law by U.S. President Herbert Hoover on 17 June 1930, that placed duties (taxes) on over 20,000 imported goods. Its political intent was to preserve American jobs, particularly in the farming sector, by discouraging imports.
What was the smooth Hawley Tariff of 1930?
The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4 ), commonly known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was a law that implemented protectionist trade policies in the United States. Sponsored by Senator Reed Smoot and Representative Willis C. Hawley, it was signed by President Herbert Hoover on June 17, 1930.
What was the goal of the Morrill Tariff?
What was the purpose of the Morrill Tariff? It was a high protective tariff that increased duties 5%-10%. The increases were designed to raise additional revenue and provide more protection for the prosperous manufacturers.
What was the Harley Smoot Tariff?
What is the Smoot-Hawley Tariff Act?
- Understanding the Smoot-Hawley Tariff Act. In June 1930, the Smoot-Hawley Tariff Act increased U.S. ...
- Legislative History. During the time of the Great Depression, farmers made up around 20% of the U.S. ...
- Impact of the Smoot-Hawley Tariff Act. On May 28, 1929, the Smoot-Hawley bill cleared the U.S. ...
- Amending Trade Policies. ...
What was the result of the Smoot-Hawley tariff?
The Smoot-Hawley Act increased tariffs on foreign imports to the U.S. by about 20%. At least 25 countries responded by increasing their own tariffs on American goods. Global trade plummeted, contributing to the ill effects of the Great Depression.
What was the Hawley Smoot Tariff and how did it backfire?
The Hawley Smoot Tariff seriously backfired as furious European countries imposed a tax on American goods making them too expensive to buy in Europe, and restricting trade which contributed to the economic crisis of the Great Depression.
Did the Hawley Smoot Tariff work?
It did not work, and the United States sank deeper into the Great Depression.” This amusing scene managed to omit the U.S. Senate, but it was on June 13, 1930, that the Senate passed the Smoot-Hawley Tariff, among the most catastrophic acts in congressional history.
What was a result of the Smoot-Hawley Tariff quizlet?
What was a consequence of the Smoot-Hawley tariff? It raised tariffs and provoked foreign countries to raise retaliatory tariffs and, as a consequence, made it harder for American farms and businesses to sell abroad.
Why did the Smoot Hawley Tariff fail?
The economists argued that the tariff increases would raise the cost of living, limit our exports as other countries retaliated, injure U.S. investors since the high tariffs would make it harder for foreign debtors to repay their loans, and damage our foreign relations. Unfortunately, this is what happened.
How did the Smoot-Hawley Tariff Act contribute to the Great Depression quizlet?
The Smoot-Hawley Tariff Act goal was to increase U.S. farmer protection against agricultural imports. Once other sectors caught wind of these changes, a large outcry to incrase tariffs in all sectors of the economy followed. The increase in this tariff added economic strain to countries during the Great Depression.
How did high tariffs damage the US economy?
Historical evidence shows tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, which results in lower income, reduced employment, and lower economic output.
How did the Smoot-Hawley Act divert consumer demand away from foreign products?
The Smoot-Hawley Act raised tariff barriers in the hope of protecting jobs and diverting consumer demand away from foreign products. The Great Depression had roots in the failure of the world economy to mount a sustained economic recovery after the end of World War I in 1918.
How did the Hawley-Smoot Tariff Impact world economy Apush?
The Hawley-Smoot Tariff wast enacted in 1930. This treaty raised tariffs on many imported goods. Many American trading partners retaliated in response to this tariff. The Hawley-Smoot Tariff might have even worsened the Great Depression.
What was the Smoot-Hawley Tariff Act?
Formally called the United States Tariff Act of 1930, this legislation, originally intended to help American farmers, raised already high import du...
How did the Smoot-Hawley Tariff Act impact the American economy?
Economists warned against the act, and the stock market reacted negatively to its passage, which more or less coincided with the start of the Great...
Why did the Smoot-Hawley Tariff Act have such a dramatic effect on trade?
The punitive tariffs raised duties to the point that countries could not sell goods in the United States. This prompted retaliatory tariffs, making...
What was the purpose of the Smoot-Hawley Tariff Act?
Also referred to as the United States Tariff Act of 1930, its purpose was to safeguard U.S. businesses and farmers.
When did Herbert Hoover raise tariffs?
During the 1928 U.S. presidential campaign, Herbert Hoover vowed to raise prices on agricultural imports. However, as soon he took office, representatives from other sectors asked him to increase tariffs on other imported goods. The bill came into law on June 17, 1930.
What did Roosevelt do to help the Great Depression?
In 1934, President Roosevelt signed the Reciprocal Trade Agreements Act, which reduced tariffs and supported trade independence and collaboration across countries. Some historians believe that the tariff hike deepened the Great Depression, which might have incited the rise of political extremism and extremist leaders.
What is non tariff?
Non-Tariff Barriers. Non-Tariff Barriers Non-tariff barriers are trade barriers that restrict the import or export of goods through means other than tariffs. The World Trade. World Trade Organization (WTO)
When did food prices skyrocket?
Food prices skyrocketed between 1915 and 1918 as countries emerged from World War I. In the 1920s, as European farmers were recovering from the war, American farmers met harsh competition and falling prices due to overproduction.
Was the League of Nations part of the Smoot-Hawley Tariff Act?
The League of Nations, of which the U.S. was not part, previously talked of a tariff treaty. However, the Smoot-Hawley Tariff Act helped undermine that idea. By September 1929, the Hoover administration experienced protests from 23 trading partners following news of the higher tariffs. However, the U.S. ignored the retaliation threat.
Why did Smoot-Hawley raise tariffs?
In June 1930, Smoot-Hawley raised already high U.S. tariffs on foreign agricultural imports. The purpose was to support U.S. farmers who had been ravaged by the Depression. Instead, it raised food prices. It also compelled other countries to retaliate with their own tariffs. That forced global trade down by 65%. 3 .
Why was the Smoot-Hawley Act passed?
The Smoot-Hawley Act was as a bill to raise tariffs for the ailing agricultural community. But it ended up as a law raising tariffs to protect industries in all economic sectors. It became a product of self-interest groups that wanted to protect their own industries.
What did Reed Smoot want?
Senator Reed Smoot wanted to protect the sugar beet business in his home state of Utah. 7 . As the bill wound its way through Congress, every legislator wanted to add protections for their states' industries. By 1929, the bill proposed tariffs on 20,000 imported goods.
What did Herbert Hoover argue for?
Congress debated the bill as the stock market crashed in October 1929. 8 . During his presidential campaign, Herbert Hoover argued for more tariff equality.
What was the Smoot-Hawley Act?
Updated November 20, 2020. The Smoot-Hawley Act is the Tariff Act of 1930. It increased 900 import tariffs by an average of 40% to 50%. 1 2 Most economists blame it for worsening the Great Depression. It also contributed to the start of World War II. In June 1930, Smoot-Hawley raised already high U.S. tariffs on foreign agricultural imports.
How many Americans were farmers in the 1920s?
Almost 20% of Americans were farmers. 4 Between 1915 and 1918, food prices skyrocketed as the world recovered from World War I. High demand for food created speculation in farmland. By the 1920s, farmers had taken on debt to fund growth and pay for the land.
What was the Hawley Smoot Tariff?
The Hawley Smoot Tariff prompted these countries to impose their own tariffs on foreign goods, especially those from the United States. These retaliation tariffs crippled international trade and worsened conditions during the Great Depression.
What was the Smoot-Hawley Tariff Act?
What Is the Smoot-Hawley Tariff Act? The Smoot-Hawley Tariff Act of 1930 raised U.S. import duties with the goal of protecting American farmers and other industries from foreign competition. The act is now widely blamed for worsening the severity of the Great Depression in the U.S. and around the world. Formally called the United States Tariff Act ...
Why was the Smoot-Hawley Tariff Act of 1930 enacted?
The Smoot-Hawley Tariff Act of 1930 was enacted to protect U.S. farmers from foreign competition by increasing tariffs on certain foreign goods. It was also purposed to offer protections to other industries from foreign competitors.
How did the United States encourage international trade?
Over the following decades, the United States steadily encouraged international trade by taking a lead role in the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO) . To this day, economists differ on the extent to which the Smoot-Hawley Act worsened ...
How much did international trade decline between 1929 and 1934?
3. Soon, 25 countries retaliated by increasing their own tariffs. As a result, international trade declined drastically, resulting in a worldwide decline of 66% between 1929 and 1934.
Why was the Smoot-Hawley Act created?
The Smoot-Hawley Act was created to protect U.S. farmers and other industries from foreign competitors. The Smoot-Hawley Act increased tariffs on foreign imports to the U.S. by about 20%. At least 25 countries responded by increasing their own tariffs on American goods.
What was the effect of the Great Crash of 1929?
Effect of the Great Crash of 1929. The first effort to pass the bill failed, stymied by moderate Senate Republicans early in 1929. However, with the stock market crash that year, the appeal of protectionist and isolationist sentiments increased.
What was the Smoot-Hawley tariff?
In the political or economic realms, the Smoot-Hawley Tariff fostered distrust among nations, leading to less cooperation. It led toward further isolationism that would be key in delaying US entry into World War II .
What was the purpose of the Smoot-Hawley Tariff Act?
The US Congress passed the United States Tariff Act of 1930, also called the Smoot-Hawley Tariff Act, in June 1930 in an effort to help protect domestic farmers and other US businesses against stepped-up imports after World War I. Historians say its excessively protectionist measures were responsible ...
What was the most protectionist tariff in American history?
It raised tariff levels above the already high rates established by the 1922 Fordney-McCumber Act. This is how Smoot-Hawley became among the most protectionist tariffs in American history.
What was Herbert Hoover's campaign pledge?
One of Herbert Hoover's campaign pledges during his 1928 election campaign was to aid the American farmer and others by raising tariff levels on agricultural products.
What was the effect of World War I on agriculture?
Then when the war ended, European producers stepped up their production as well. This led to massive agricultural overproduction during the 1920s. This, in turn, caused declining farm prices during the second half of that decade. One of Herbert Hoover's campaign pledges during his 1928 election campaign was to aid the American farmer and others by raising tariff levels on agricultural products.
How much did the US import from Europe in 1929?
For example, US imports from Europe declined from a 1929 high of $1.334 billion to just $390 million in 1932, while U.S. exports to Europe fell from $2.341 billion in 1929 to $784 million in 1932. In the end, world trade declined by about 66% between 1929 and 1934. In the political or economic realms, the Smoot-Hawley Tariff fostered distrust ...
Who sponsored the Smoot-Hawley tariff?
The Smoot-Hawley Tariff was sponsored by US Sen. Reed Smoot and US Rep. Willis Hawley. When the bill was introduced in Congress, revisions to the tariff began to grow as one special interest group after another asked for protection.
Explaining the Passage of Smooth-Hawley
Barry Eichengreen uses an interest groups mode to explain the passage of the Smooth-Hawley Tariff. According to this theory, producers are affected differently by exposure to trade. FEP will fall along cleavages between winners from trade and the losers from trade.
Support of Free Trade
On another note; although many people siding with tariffs defend that it is beneficial for economic growth, it is very interesting to see the reactions of the era's political and economic leaders:
Works cited
Eichengreen, Barry E. “The Political Economy of the Smoot-Hawley Tariff.” in Frieden, Jeffry A., and David A. Lake. International Political Economy: Perspectives on Global Power and Wealth. 4th ed. Boston: Bedford/St. Martin’s, 2000
Overview
The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4), commonly known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was a law that implemented protectionist trade policies in the United States. Sponsored by Senator Reed Smoot and Representative Willis C. Hawley, it was signed by President Herbert Hoover on June 17, 1930. The act raised US tariffs on over 20,000 imported goo…
Sponsors and legislative history
In 1922, Congress passed the Fordney–McCumber Tariff Act, which increased tariffs on imports.
The League of Nations' World Economic Conference met at Geneva in 1927, concluding in its final report: "the time has come to put an end to tariffs, and to move in the opposite direction." Vast debts and reparations could be repaid on…
Opponents
In May 1930, a petition was signed by 1,028 economists in the United States asking President Hoover to veto the legislation, organized by Paul Douglas, Irving Fisher, James T.F.G. Wood, Frank Graham, Ernest Patterson, Henry Seager, Frank Taussig, and Clair Wilcox. Automobile executive Henry Ford also spent an evening at the White House trying to convince Hoover to veto the bill, calling it "an economic stupidity", while J. P. Morgan's Chief Executive Thomas W. Lamont said he …
Retaliation
Most of the decline in trade was due to a plunge in GDP in the US and worldwide. However beyond that was additional decline. Some countries protested and others also retaliated with trade restrictions and tariffs. American exports to the protesters fell 18% and exports to those who retaliated fell 31%.
Threats of retaliation by other countries began long before the bill was enacted into law in June …
Tariff levels
In the two-volume series published by the US Bureau of the Census, "The Historical Statistics of the United States, Colonial Times to 1970, Bicentennial Edition", tariff rates have been represented in two forms. The dutiable tariff rate peak of 1932 was 59.1%, second only to the 61.7% rate of 1830.
However, 63% of all imports in 1933 were not taxed, which the dutiable tariff ra…
After enactment
At first, the tariff seemed to be a success. According to historian Robert Sobel, "Factory payrolls, construction contracts, and industrial production all increased sharply." However, larger economic problems loomed in the guise of weak banks. When the Creditanstalt of Austria failed in 1931, the global deficiencies of the Smoot–Hawley Tariff became apparent.
US imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decrease…
End of tariffs
The 1932 Democratic campaign platform pledged to lower tariffs. After winning the election, President Franklin Delano Roosevelt and the now-Democratic Congress passed Reciprocal Trade Agreements Act of 1934. This act allowed the President to negotiate tariff reductions on a bilateral basis and treated such a tariff agreement as regular legislation, requiring a majority, rather than as a treaty requiring a two-thirds vote. This was one of the core components of the trade negotiatin…
In modern political dialogue
In the discussion leading up to the passage of the North American Free Trade Agreement (NAFTA) then-Vice President Al Gore mentioned the Smoot–Hawley Tariff as a response to NAFTA objections voiced by Ross Perot during a debate in 1993 they had on The Larry King Show. He gave Perot a framed picture of Smoot and Hawley shaking hands after its passage.
In April 2009, then-Representative Michele Bachmann made news when, during a speech, she ref…
Understanding The Smoot-Hawley Tariff Act
Legislative History
- During the time of the Great Depression, farmers made up around 20% of the U.S. population. Food prices skyrocketed between 1915 and 1918 as countries emerged from World War I. In the 1920s, as European farmers were recovering from the war, American farmers met harsh competition and falling prices due to overproduction. As a result, American agricultural bodies p…
Impact of The Smoot-Hawley Tariff Act
- On the Stock Market
On May 28, 1929, the Smoot-Hawley bill cleared the U.S. House of Representatives. On March 24, 1930, it passed the Senate, triggering a fall in stock prices. On June 17, 1930, President Herbert Hoover signed the bill into law, further plummeting the stock market. Foreigners started withdra… - On Global Relations
The legislation did the most harm by souring trade relations with other countries. The League of Nations, of which the U.S. was not part, previously talked of a tariff treaty. However, the Smoot-Hawley Tariff Act helped undermine that idea. By September 1929, the Hoover administration ex…
Amending Trade Policies
- The drastic effects of the Smoot-Hawley Tariff Act influenced the long-term trade policies. At the start of the Reciprocal Trade Agreements Act of 1934, the U.S. began to negotiate exclusive trade policies with countries. Over the following decades, the U.S. encouraged international trade by taking a lead role in the General Agreement on Tariffs and Trade (GATT), the North American Fre…
Related Readings
- CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA)™certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful: 1. Economic Union 2. North American Free Trade Agreement (NAFTA) 3. Non-Tariff Barriers 4. World Trade Organiz…