The Smoot-Hawley Tariff

Course Outline

International Trade

Course (61 videos)

The Smoot-Hawley Tariff

This video draws on findings from Douglas Irwin's paper, "The Smoot-Hawley Tariff: A Quantitative Assessment." During the Great Depression, real output in the U.S. plummeted and unemployment peaked as high as 25%. During this period, tariffs went up quite a bit, the most notable of them being the Smoot-Hawley Tariff. This tariff passed in June of 1930 and increased duties by 22.7% and increased the price of imports by 5.8%. The volume of U.S. Imports fell by about 41-42% between 1930-32. But, this decrease was not entirely due to Smoot-Hawley. At the same time, real GDP fell by 29.8% in the U.S., leading to less imports. All in all, Smoot-Hawley likely accounted for a little more than half of the decline in imports. Today, most economists agree that Smoot-Hawley was a bad idea for many reasons, a couple being that it cut off trade with key partners and lowered business confidence. There was also a trade retaliation effect, leading to a 10% decrease in value of U.S. exports. The good news — as the video points out — is that the U.S. moved back toward free trade in the late 1930s.

Teacher Resources

Subtitles


Turn captions on or off:

  1. If captions are available the (CC) icon will be visible on the player.
  2. To turn captions on, tap (CC).
  3. To turn captions off, tap (CC) again.
     

Select caption language: 

  1. Click the settings icon (⚙) at the bottom of the video screen.
  2. Click Subtitles/CC.
  3. Select a language.
     


 

Contribute Translations!

Join the team and help us provide world-class economics education to everyone, everywhere for free! You can also reach out to us at support@mru.org for more info.


Submit subtitles

 

 

Accessibility

We aim to make our content accessible to users around the world with varying needs and circumstances.

Currently we provide:


Are we missing something? Please let us know at support@mru.org

Download

Creative Commons

Creative Commons License

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
The third party material as seen in this video is subject to third party copyright and is used here pursuant
to the fair use doctrine as stipulated in Section 107 of the Copyright Act. We grant no rights and make no
warranties with regard to the third party material depicted in the video and your use of this video may
require additional clearances and licenses. We advise consulting with clearance counsel before relying
on the fair use doctrine.