The Smoot-Hawley Tariff Act impact on the economy

Posted on: March 10, 2025 at 20:11:08 CT

The Smoot-Hawley Tariff Act, signed into law in 1930, is often blamed for worsening the Great Depression, though it was not the sole cause. The tariff raised U.S. import duties to historically high levels in an attempt to protect American industries and jobs. In response, many countries retaliated by imposing their own tariffs, which led to a sharp decline in global trade. This contributed to the economic downturn by reducing international commerce, hurting businesses, and increasing unemployment worldwide.

However, the Great Depression had multiple causes, including the stock market crash of 1929, bank failures, and systemic weaknesses in the U.S. economy. The Smoot-Hawley Tariff, while certainly harmful to global trade, was more of a contributing factor rather than a primary cause of the Depression. Economists generally agree that while the tariff worsened the situation, the Depression's roots were deeper, tied to economic imbalances and speculative bubbles.