Smoot-Hawley Tariff Act

Tariff Act of 1930

Long title	An Act To provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes.
Nicknames	Smoot-Hawley Tariff, Hawley-Smoot Tariff
Enacted by	the 71st United States Congress
Effective	March 13, 1930
Citations
Public law	Pub.L. 71–361
Statutes at Large	ch. 497, 46 Stat. 590
Legislative history
Introduced in the House of Representatives as H.R. 2667 by Willis C. Hawley (R-OR) on April or May 1929 Committee consideration by House Ways and Means, Senate Finance Passed the House on May 28, 1929 (264–147) Passed the Senate on March 24, 1930 (53–31) Reported by the joint conference committee on June 9, 1930; agreed to by the Senate on June 13, 1930 (without division, after motion to recommit failed 42–44) and by the House on June 14, 1930 (222–153) Signed into law by President Herbert Hoover on June 17, 1930

The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4), otherwise known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was an act implementing protectionist trade policies sponsored by Senator Reed Smoot and Representative Willis C. Hawley and signed into law on June 17, 1930. The act raised U.S. tariffs on over 20,000 imported goods.

The tariffs (this does not include duty-free imports – see Tariff levels below) under the act were the second-highest in the U.S. in 100 years, exceeded by a small margin by the Tariff of 1828. The Act and following retaliatory tariffs by America's trading partners helped reduce American exports and imports by more than half during the Depression. Although economists disagree by how much, the consensus view among economists and economic historians is that "The passage of the Smoot-Hawley Tariff exacerbated the Great Depression."

In 1922, Congress passed the Fordney–McCumber Tariff act which increased tariffs on imports.

The League of Nations' World Economic Conference met at Geneva in 1927, concluding in its final report: "the time has come to put an end to tariffs, and to move in the opposite direction." Vast debts and reparations could only be repaid through gold, services or goods; but the only items available on that scale were goods. However, many of the delegates' governments did the opposite, starting in 1928 when France passed a new tariff law and quota system.

By the late 1920s the economy of the United States had made exceptional gains in productivity due to electrification, which was a critical factor in mass production. Horses and mules had been replaced by motorcars, trucks and tractors. One-sixth to one-quarter of farmland previously devoted to feeding horses and mules was freed up, contributing to a surplus in farm produce. Although nominal and real wages had increased, they did not keep up with the productivity gains. As a result the ability to produce exceeded market demand, a condition that was variously termed overproduction and underconsumption. Senator Smoot contended that raising the tariff on imports would alleviate the overproduction problem; however, the US had actually been running a trade account surplus, and although manufactured goods imports were rising, manufactured exports were rising even faster. Food exports had been falling and were in trade account deficit; however the value of food imports were a little over half that of manufactured imports.

...
Wikipedia