Smoot–Hawley Tariff Act

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Tariff Act of 1930
Great Seal of the United States
Nicknames Smoot-Hawley Tariff, Hawley-Smoot Tariff
Enacted by the 71st United States Congress
Effective March 13, 1930
Public law Pub.L. 71–361
Statutes at Large ch. 497, 46 Stat. 590
Legislative history
  • Committee consideration by House Ways and Means, Senate Finance

The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4), otherwise known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff,[1] was an act 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.[2]

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.[3] The Act and following retaliatory tariffs by America's trading partners helped reduce American exports and imports by more than half during the Depression.[4] But economist disagree by how much.

Sponsors and legislative history[edit]


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


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 Horses and mules had been replaced by motorcars, trucks and tractors.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 U.S. 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.[6]













In 1932, with the depression only having worsened for workers and farmers despite Smoot and Hawley's promises of prosperity from a high tariff, the two lost their seats in the elections that year.[16]

Tariff levels[edit]


Coincident economic events[edit]


U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. GNP fell from $103.1 billion in 1929 to $75.8 billion in 1931 and bottomed out at $55.6 billion in 1933.[18] Imports from Europe decreased from a 1929 high of $1.3 billion to just $390 million during 1932, while U.S. exports to Europe decreased from $2.3 billion in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934.[19]



Unemployment was at 8% in 1930 when the Smoot–Hawley tariff was passed, but the new law failed to lower it. The rate jumped to 16% in 1931, and 25% in 1932–33.[20] There is some contention about whether this can necessarily be attributed to the tariff, however.[21][22] It was not until World War II, during which "the American economy expanded at an unprecedented rate",[23] that unemployment fell below 1930s levels.[24]


End of the tariffs[edit]

The 1932 Democratic campaign platform pledged to lower tariffs. After winning the election, President Franklin Delano Roosevelt and the now-Democratic Congress passed Reciprocal Trade Agreements Act of 1934. This act allowed the President to negotiate tariff reductions on a bilateral basis, and also treated such a tariff agreement as regular legislation, requiring a majority, rather than as a treaty requiring a two-thirds vote. This was one of the core components of the trade negotiating framework that developed after World War II. The tit-for-tat responses of other countries were understood to have contributed to a sharp reduction of trade in the 1930s. After World War II this understanding supported a push towards multi-lateral trading agreements that would prevent similar situations in the future. While the Bretton Woods Agreement of 1944 focused on foreign exchange and did not directly address tariffs, those involved wanted a similar framework for international trade. President Harry S. Truman launched this process in December 1945 with negotiations for the creation of the International Trade Organization (ITO). As it happened, separate negotiations on the General Agreement on Tariffs and Trade (GATT) moved more quickly, with an agreement signed in October 1947; in the end, the US never signed the ITO agreement. Adding a multilateral "most-favored-nation" component to that of reciprocity, the GATT served as a framework for the gradual reduction of tariffs over the subsequent half century.[26]

Post-World-War-II changes to the Smoot-Hawley tariffs reflected a general tendency of the United States to reduce its tariff levels unilaterally while its trading partners retained their high levels. The American Tariff League Study of 1951 compared the free and dutiable tariff rates of 43 countries. It found that only seven nations had a lower tariff level than the U.S. (5.1%), while eleven nations had free and dutiable tariff rates higher than the Smoot-Hawley peak of 19.8% including the United Kingdom (25.6%). The 43-country average was 14.4% which was 0.9% higher than the U.S. level of 1929 demonstrating that few nations were reciprocating in reducing their levels as the U.S. reduced its own.[27]

Presence in modern political dialogue[edit]


The act has been compared to the 2010 Foreign Account Tax Compliance Act (FATCA), with Andrew Quinlan from the Center for Freedom and Prosperity calling FATCA "the worst economic idea to come out of Congress since Smoot-Hawley".[28]

Popular culture[edit]

The Smoot–Hawley Tariff Act is referenced in multiple films, including the 1986 comedy film Ferris Bueller's Day Off.[29]

See also[edit]


  2. ^ Taussig (1931)
  5. ^ The War: the root and remedy, George Peel, 1941
  8. ^ a b c Irwin, Douglas A.; Randall S. Kroszner (December 1996). "Log-Rolling and Economic Interests in the Passage of the Smoot-Hawley Tariff" (PDF). Carnegie-Rochester Conference Series on Public Policy. 45: 6. doi:10.1016/s0167-2231(96)00023-1. Retrieved 17 January 2011. 
  18. ^ Burewau of the Census, Historical Statistics series F-1
  21. ^ Eckes, p. 113
  27. ^ Lloyd, Lewis E. Tariffs: The Case for Protection. The Devin-Adair Co., 1955, Appendix, Table VI, p. 188-189
  28. ^ "Senator Rand Paul Introduces Bill to Repeal FATCA! - lets-get-republican-presidential-candidates-uon-the-recordu-for-fatca-repeal - Repeal FATCA". 
  29. ^ "Ferris Bueller's Day Off (1986) – Memorable Quotes", Internet Movie Database .


  • Archibald, Robert B.; =Feldman, David H. (1998), "Investment During the Great Depression: Uncertainty and the Role of the Smoot–Hawley Tariff", Southern Economic Journal, 64 (4): 857–879, doi:10.2307/1061208, JSTOR 1061208 .
  • Crucini, Mario J. (1994), "Sources of variation in real tariff rates: The United States 1900 to 1940", American Economic Review, 84 (3): 346–353, JSTOR 2118081 .
  • Crucini, Mario J.; Kahn, James (1996), "Tariffs and Aggregate Economic Activity: Lessons from the Great Depression", Journal of Monetary Economics, 38 (3): 427–467, doi:10.1016/S0304-3932(96)01298-6 .
  • Eichengreen, Barry (1989), "The Political Economy of the Smoot–Hawley Tariff", Research in Economic History, 12: 1–43 .
  • Irwin, Douglas (1998), "The Smoot–Hawley Tariff: A Quantitative Assessment", Review of Economics and Statistics, 80 (2): 326–334, doi:10.1162/003465398557410 .
  • Kottman, Richard N. (1975), "Herbert Hoover and the Smoot–Hawley Tariff: Canada, A Case Study", Journal of American History, 62 (3): 609–635, doi:10.2307/2936217, JSTOR 2936217 .
  • Koyama, Kumiko (2009), "The Passage of the Smoot–Hawley Tariff Act: Why Did the President Sign the Bill?", Journal of Policy History, 21 (2): 163–186, doi:10.1017/S0898030609090071 .
  • Madsen, Jakob B. (2001), "Trade Barriers and the Collapse of World Trade during the Great Depression", Southern Economic Journal, 67 (4): 848–868, doi:10.2307/1061574, JSTOR 1061574 .
  • McDonald, Judith; =O'Brien, Anthony Patrick; Callahan, Colleen (1997), "Trade Wars: Canada's Reaction to the Smoot–Hawley Tariff", Journal of Economic History, 57 (4): 802–826, doi:10.1017/S0022050700019549, JSTOR 2951161 .

External links[edit]
