The Smoot-Hawley Tariff Act of 1930 increased import taxes in the U.S. to shield American farmers and businesses from international competition. Today, this act is often held responsible for deepening the Great Depression both in the U.S. and globally.
Officially known as the United States Tariff Act of 1930, it’s usually called the Smoot-Hawley Tariff or the Hawley-Smoot Tariff. The legislation was introduced by Senator Reed Owen Smoot (R-Utah) and Representative Willis Chatman Hawley (R-Ore.).
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It was passed in June 1930, increased the already steep import taxes on foreign agricultural products and manufactured goods by around 20%. This followed the Fordney-McCumber Act of 1922, which had already raised the average import tax on foreign goods to about 40%.
The main goal of the Smoot-Hawley Act was to provide more protection for American farmers who were having a tough time competing with agricultural imports, especially from Europe. However, it didn’t take long for lobbyists from other American industries to start pushing for similar protections for their products.
Conclusion
The Smoot-Hawley Tariff of 1930 increased import duties on many products coming into the U.S., leading to serious economic fallout. In retaliation, other countries imposed their own tariffs on American exports, which further decreased trade and worsened the Great Depression.