History The Great Depression Questions
The Smoot-Hawley Tariff Act, passed in 1930, was a protectionist measure that raised tariffs on thousands of imported goods in an attempt to protect American industries during the Great Depression.
Causes:
1. Economic nationalism: The act was driven by a desire to protect American industries and jobs from foreign competition.
2. Agricultural crisis: American farmers were struggling due to overproduction and falling prices, and the act aimed to shield them from foreign agricultural imports.
3. Political pressure: Industries and labor unions lobbied for higher tariffs to safeguard their interests.
Effects:
1. Trade retaliation: Other countries responded by imposing their own tariffs on American goods, leading to a decline in international trade and exacerbating the global economic downturn.
2. Reduced exports: American exports decreased significantly as foreign markets became less accessible due to higher tariffs.
3. Economic contraction: The act contributed to a contraction in the global economy, deepening the severity and duration of the Great Depression.
4. Unemployment: The decline in international trade and reduced exports led to job losses in industries reliant on foreign markets.
5. Political tensions: The act strained diplomatic relations with other countries and contributed to a rise in protectionist policies worldwide, hindering international cooperation and exacerbating global economic instability.