Hoover Signs the Smoot-Hawley Tariff Act (Great Events from History II: Business and Commerce Series)
Article abstract: Herbert Hoover signed the Smoot-Hawley Tariff Act, sparking foreign retaliation against American products and helping to bring on a temporary collapse of the international trading system.
Summary of Event
The Smoot-Hawley Tariff raised average U.S. tariff rates by approximately 18 percent. The largest increases were on agricultural products, on which average tariff rates increased by about 57 percent. President Herbert Hoover’s signing of the tariff bill on June 17, 1930, climaxed a political struggle that had lasted more than a year. Proponents of higher tariff rates had hoped in particular to give relief to farmers, whose incomes generally had lagged during the prosperity of the 1920’s. More generally, they hoped that protection from foreign competition would allow U.S. producers to avoid production cutbacks and layoffs as the Great Depression began to unfold.
Opponents of higher tariffs had three main concerns. First, they feared that higher tariffs would end up protecting inefficient domestic producers and thereby result in higher prices for consumers. Second, they were afraid that an increase in U.S. tariffs would spark foreign retaliation, hurting the U.S. export sector. Finally, opponents were afraid that if the United States reduced its purchases of goods from other countries (particularly in Europe) that were heavily indebted to the United States, then it would become difficult...
(The entire section is 2265 words.)
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