The Smoot-Hawley Tariff Act, a law which raised taxes on goods imported into the U.S, was designed to protect American businesses from foreign competition. Watch this 3 minute video before answering the question: Explain in your own words how this act contributed to the Great Depression. (6 points)

Question

this is the transcript of the video:
"Tariff Act was one of many policies adopted by President Herbert Hoover the sharp negative effects that followed came as a shock to the bill's sponsors that he was pestered towards the beginning of the production and his proponents food quality said it would actually help mitigate unemployment and revive the economy versus County just got much worse. Partly that is due to super quality itself. A lot of countries would tell you these that meant US exports fell just as much as US imports. In fact, exports fell even faster than US imports. So it really added an introductory impact on the US and the red a lot of ill will against that piece. Other countries resent from the fact that here was the world's largest economy, a creditor country that was trying to get other countries to repay their debts, and they were stopping them in terms of their ability to repay those debts that need to pay value. Other countries resented that they struck back with the US and the Home Rule trading system should collapse. These outcomes came as no surprise to economists of today, 1000 economists wrote to President Herbert Hoover, asking to veto or not to sign the School Quality legislation and be determined to sign. Economists really did predict what would happen in a private collapse with the increased pre friction, other countries would respond mentality against those exports. We wouldn't help out farmers at all. And yet, it passed. The Depression got worse, and the reputation was just the beginning of a protectionist wave in Congress, most farmers were export oriented. They sold their crops overseas rather than Facebook. And once Congress got going on this, they raised not only farmers were money on industrial goods as well, and the protection since the predictable devastation that student Holly brought, most presidents, Democrats and Republicans have been largely free traders. Franklin Roosevelt invade against the act during his first presidential campaign, presidents have served not to be a nuclear sexual in terms of what their trademarks are. The country opens the national and for the high liberalization and other countries to produce their trade barriers through the general training and presence from Democrats, from Johnson Clinton to Republicans, Bush and Reagan have always harkened back as a bad thing that Congressman"

Answer 1

The Smoot-Hawley Tariff Act, enacted in 1930, aimed to protect American businesses by imposing high tariffs on imported goods. However, this legislation inadvertently exacerbated the economic difficulties that contributed to the Great Depression for several reasons.

Firstly, the tariffs led to a significant reduction in U.S. exports. As other countries retaliated with their own tariffs, American goods became more expensive and less competitive abroad. This decline in exports had a cascading effect, causing further layoffs and economic contraction within the U.S. economy. It was noted in the video that exports fell even faster than imports, indicating a shrinking market for American products internationally.

Secondly, the act fostered resentment among trading partners. As the world's largest economy, the U.S. imposed restrictions that hampered the ability of other countries to repay their debts. This created a negative atmosphere in international relations, which further strained global trade. The resulting trade war diminished economic cooperation and led to the collapse of the international trading system, deepening the economic crisis.

Moreover, the economic predictions of experts were ignored. Over a thousand economists had urged President Herbert Hoover to veto the legislation due to the foreseen adverse effects it would have on global economics. Their warnings highlighted a broader understanding of economic interdependence that the policymakers at the time overlooked.

As the act's protectionist measures took hold, they disproportionately harmed farmers and industrial workers who relied on export markets. The resulting decline in their incomes contributed to widespread financial distress. Therefore, instead of stimulating the economy, the Smoot-Hawley Tariff Act intensified the economic downturn, making the Great Depression worse and leading to a wave of protectionism that hindered recovery efforts in subsequent years.

In conclusion, the Smoot-Hawley Tariff Act contributed to the Great Depression by damaging international trade relations, leading to retaliatory tariffs from other nations, and exacerbating economic hardships for American producers and workers, ultimately illustrating the negative impact of isolationist trade policies during a time of economic vulnerability.