Smoot–Hawley Tariff Act

The Smoot- Hawley Tariff Act was a statute enacted on June 17, 1930 Act in the U.S., with the U.S. tariffs on over 20,000 products were increased to record levels. The aim of the protectionist law was to protect the U.S. economy from foreign competition.

Formation

Named is the Smoot- Hawley Tariff after its initiators, Senator Reed Smoot of Utah and Willis C. Hawley, a member of the House of Representatives from Oregon. It was adopted by the House of Representatives on 28 May 1929. Here, 264 members of the law and 147 voted against. Of the 264 supporters were 244 Republicans, only 20 belonged to the Democratic Party. In the Senate, it was adopted by 44:42 votes, 39 Republicans and five Democrats voted for the bill.

On June 17, 1930, was adopted by President Herbert Hoover as law.

Criticism

Henry Ford and Thomas W. Lamont called the law an "economic stupidity " and " stupid ". In May 1930 1028 economists signed a petition against the Smoot- Hawley Tariff, which was organized by Paul Douglas, Irving Fisher, James TFG Wood, Frank Graham, Ernest Patterson, Henry Seager, Frank Taussig, and Clair Wilcox. During his presidential campaign in 1932, the Democrat and later President Franklin D. Roosevelt spoke out against the law.

23 U.S. trading partners protested against the law.

Effects

The law had a large share of the decline of the U.S. foreign trade, and thus the collapse of world trade during the global economic crisis. It intensified the protectionist tendencies in the world. The U.S. imports declined 1929-1933 by 66% from $ 4.4 billion to $ 1.5 billion. Exports fell by 61% from $ 5.4 billion to 2.1 billion dollars. Imports from Europe fell from 1.334 billion in 1929 to $ 390 million in 1932, and exports to Europe from 2.341 billion to 784 million dollars.

Both Reed Smoot and Willis C. Hawley missed in 1932 re-election to Congress.