Smoot-Hawley Tariff Act: This act, signed into law in 1930, raised import duties on thousands of goods, aiming to protect American farmers and businesses from foreign competition.
Impact on International Trade: The Smoot-Hawley Tariff Act led to a sharp decline in international trade as other countries retaliated with their own tariffs, making it harder for the US to export goods.
Economic Consequences: The reduction in trade contributed to a decline in global demand, further deepening the economic downturn and leading to higher unemployment and economic hardship.
Retaliatory Tariffs: Other countries retaliated by imposing their own tariffs on American exports, leading to a collapse of international trade and a sharp decline in American exports. Economic Downturn: The tariffs worsened the economic downturn by reducing demand for goods and services, leading to higher unemployment and prolonging economic hardship. Economic Experts' Views:
Economists and economic historians generally agree that the Smoot-Hawley Tariff Act worsened the effects of the Great Depression by hindering international trade and leading to retaliatory tariffs.
Example: Imports from Europe fell from $1,334 million to just $390 million by 1932 and exports to Europe fell from $2,341 million to $784 million by 1932.