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Smoot-Hawley Tariff
The Smoot-Hawley Tariff Act (formally the Tariff Act of 1930) was a United States federal law that raised import duties on more than 20,000 traded goods to historically high levels. Signed by President Herbert Hoover on 17 June 1930, it was sponsored by Senator Reed Smoot of Utah and Representative Willis C. Hawley of Oregon. The act is most commonly examined in the context of the Great Depression, and its role in deepening or prolonging that crisis is among the more debated questions in twentieth-century economic history.
Current State of Knowledge
The act raised average U.S. tariff rates on dutiable imports to roughly 45-50 percent, among the highest levels in the nation's history. It provoked retaliatory tariffs from trading partners including Canada, Great Britain, France, and Germany. U.S. imports and exports both fell sharply in the years following its passage, though the degree to which the tariff caused that contraction-as opposed to reflecting and accelerating a contraction already underway-remains a subject of scholarly discussion.
Economists and historians broadly agree that the act worsened international trade relations and contributed to the contraction of global trade in the early 1930s. There is less agreement on whether it was a primary cause of the Depression's severity, a secondary aggravating factor, or a response to conditions that would have produced similar outcomes regardless. The act is frequently cited in policy debates over protectionism and trade liberalization as a cautionary example, though the lessons drawn from it vary by interpreter. See smoot-hawley-tariff-primary-cause-depression-debate and smoot-hawley-tariff-retaliation-magnitude-debate.
Consensus Status
There is broad agreement among economists across institutions that the Smoot-Hawley Tariff contributed to a reduction in international trade volume during the early 1930s and that retaliatory measures by trading partners exacerbated that decline. This conclusion appears across mainstream economic history literature regardless of ideological orientation. See smoot-hawley-tariff-trade-contraction-consensus.
Agreement is narrower on the question of the tariff's independent causal weight in the Depression. Monetarist, Keynesian, and institutional economists have each assigned it different roles relative to other factors such as monetary contraction, banking failures, and demand collapse.
Viewpoints
Primary cause of the Great Depression's severity: Some economists and historians argue that Smoot-Hawley, through the retaliatory spiral it triggered, was among the central mechanisms turning a domestic downturn into a global economic catastrophe. See smoot-hawley-tariff-primary-cause-viewpoint.
Significant but secondary factor: A widely held position holds that the tariff worsened an already severe contraction but that monetary policy failures and banking panics were the dominant causes of the Depression's depth. This view is associated with Milton Friedman and Anna Schwartz, among others. See smoot-hawley-tariff-secondary-factor-viewpoint.
Marginal or overstated role: Some economists contend that U.S. trade as a share of GDP was small enough in 1930 that the tariff's direct macroeconomic impact has been significantly overstated, and that its symbolic and retaliatory effects, while real, did not meaningfully alter the Depression's trajectory. See smoot-hawley-tariff-overstated-role-viewpoint.
Legitimate exercise of protectionist policy: A smaller body of opinion, more common in heterodox economics and certain nationalist political traditions, holds that protecting domestic industries through tariffs is a defensible policy tool, and that Smoot-Hawley's negative reputation reflects ideological commitments to free trade rather than neutral empirical assessment. See smoot-hawley-tariff-protectionist-defense-viewpoint.
Controversies
Passage over economist opposition: More than 1,000 economists signed an open letter urging President Hoover to veto the bill; the decision to sign it despite this opposition generated lasting debate about the relationship between expert consensus and political decision-making. See smoot-hawley-tariff-economist-petition-controversy.
Hoover's motivations: Historians have disputed whether Hoover signed the bill under political pressure, out of genuine conviction, or based on assurances that executive flexibility would allow rates to be moderated in practice. See smoot-hawley-tariff-hoover-signing-controversy.
Related Pages
Footnotes
1. U.S. Congress. Tariff Act of 1930, Pub. L. 71-361, 46 Stat. 590 (17 June 1930). 2. Douglas A. Irwin, Peddling Protectionism: Smoot-Hawley and the Great Depression (Princeton: Princeton University Press, 2011), 4-6, 89-114. 3. Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867-1960 (Princeton: Princeton University Press, 1963), 299-419. 4. Barry Eichengreen, Globalizing Capital: A History of the International Monetary System, 2nd ed. (Princeton: Princeton University Press, 2008), 66-92. 5. Alfred E. Eckes Jr., Opening America's Market: U.S. Foreign Trade Policy Since 1776 (Chapel Hill: University of North Carolina Press, 1995), 100-139. 6. Irwin, Peddling Protectionism, 93-97 (discussion of the economist petition). 7. Robert A. Pastor, Congress and the Politics of U.S. Foreign Economic Policy, 1929-1976 (Berkeley: University of California Press, 1980), 77-84.