How did the American tariff policy slightly cause the Great Depression to occur?

Asked on by ilykidd

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The US tariff policy didn't cause the Depression to start since the Smoot-Hawley Tariff was not passed until 1930.  However, the tariff did help to make the Depression worse.  This was because it helped to cut down on the amount of trade going on between countries.

After the US enacted this tariff, the governments of Canada and Great Britain, among others, enacted tariffs of their own.  These may or may not have been in retaliation for the US tariff.  One way or another, the tariffs' cumulative impact was considerable.  As the "salem-history" link below says,

The League of Nations estimated that the volume of world trade declined in real terms by more than 65 percent between 1929 and 1933.

The US tariff policy helped to cause this because it helped to make it less profitable for nations to trade with each other and because it helped make other countries impose their own tariffs.  These tariffs, and the reduction of trade that they caused, helped to deepen the Depression.


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