{"id":108042,"date":"2024-12-03T00:06:22","date_gmt":"2024-12-03T00:06:22","guid":{"rendered":"https:\/\/lascrucestoday.com\/newstalklc\/what-to-know-about-the-smoot-hawley-tariffs-and-what-their-legacy-means-for-trump\/"},"modified":"2024-12-03T00:06:22","modified_gmt":"2024-12-03T00:06:22","slug":"what-to-know-about-the-smoot-hawley-tariffs-and-what-their-legacy-means-for-trump","status":"publish","type":"post","link":"https:\/\/lascrucestoday.com\/newstalklc\/what-to-know-about-the-smoot-hawley-tariffs-and-what-their-legacy-means-for-trump\/","title":{"rendered":"What to know about the Smoot-Hawley tariffs and what their legacy means for Trump"},"content":{"rendered":"
\n
Central Press\/Getty Images<\/figcaption><\/figure>\n

(WASHINGTON) — A Republican president-elect pledges<\/a> support for expansive tariffs as a means of protecting<\/a> U.S. businesses and hamstringing global competitors.<\/p>\n

That description may conjure up former President Donald Trump, but it also applies to Herbert Hoover, who led the country nearly a century ago during the onset of the Great Depression.<\/p>\n

Within months of the stock market crash, Hoover signed into law the Smoot-Hawley Tariff Act, a 1930 measure that increased tariffs for a broad swathe of imported goods. In response, several countries imposed retaliatory tariffs<\/a> and trade plummeted. Many economists view the measure as a factor that exacerbated the nation’s economic downturn.<\/p>\n

“A whole generation of Republicans and Democrats after World War II was very much conditioned against tariff hikes because of the experience of the 1930s. Now we have a new generation of leaders who are much more willing to pull the trigger on higher tariffs,” Douglas Irwin, a professor of economics at Dartmouth College and author of “Peddling Protectionism: Smoot-Hawley and the Great Depression,” told ABC News.<\/p>\n

Here’s what to know about the Smoot-Hawley Tariff Act, its economic impact, and what its legacy means for tariffs promised by Trump, according to experts.<\/span><\/p>\n

What is the Smoot-Hawley Tariff Act?<\/strong><\/p>\n

The Smoot-Hawley Tariff Act arrived at a moment of economic crisis.<\/p>\n

As the stock market wobbled and financial panic took hold, Congress negotiated a set of tariff increases that initially aimed to protect U.S. farmers from foreign competition but ultimately extended to a wide range of manufactured goods.<\/p>\n

The measure is named after its key supporters in Congress: Republican Sen. Reed Smoot of Utah and Republican Rep. Willis Hawley of Oregon. It passed the Senate by a narrow margin of 44 to 42, and sailed through the House of Representatives by a vote of 264 to 147. Hoover signed Smoot-Hawley into law in June 1930.<\/p>\n

For products already facing tariffs, the law, on average, raised the import tax from 40% to nearly 60%, making for an increase of roughly 20 percentage points, Kris Mitchener, a professor of economics at Santa Clara University who studies Smoot-Hawley, told ABC News. It also significantly expanded the number of goods subject to a tariff, he added.<\/p>\n

“It culminated in a more or less complete rewrite of the tariff schedule,” Mitchener said, referring to the nation’s tariff code.<\/p>\n

What happened after Smoot-Hawley took effect, and did it cause the Great Depression?<\/strong><\/p>\n

The Smoot-Hawley tariffs set off a near-immediate trade war, in which several foreign nations responded to tariffs by slapping U.S. imports with taxes of their own.<\/p>\n

For instance, Canada placed tariffs on 16 products that accounted for roughly a third of U.S. exports, according to a working paper<\/a> co-authored by Mitchener in 2021. France and Spain both slapped taxes on imported American automobiles, a major U.S. industry.<\/p>\n

“America’s trade partners responded by targeting U.S. exports,” Mitchener said. “The most important declines were in the products that were targeted.”<\/p>\n

As a result, trading partners suffered reduced output, but so did the United States, Michener said.<\/p>\n

The trade slowdown weakened the economy and exacerbated the nation’s economic downturn, experts said. However, the Great Depression had taken hold before the effects of Smoot-Hawley, ruling it out as a cause of the crisis, they added.<\/span><\/p>\n

“Smoot-Hawley impacted the U.S. economy at a vulnerable moment,” Irwin said.<\/p>\n

What could the legacy of Smoot-Hawley mean for Trump’s tariff proposals?<\/strong><\/p>\n

Smoot-Hawley cast a shadow over tariff policy for decades, Irwin said. “It gave tariffs a bad name,” he added.<\/p>\n

For decades, prominent members of both major parties focused on the risks posed by tariffs, occasionally citing Smoot-Hawley, Irwin said.<\/p>\n

“The Smoot-Hawley tariff ignited an international trade war and helped sink our country into the Great Depression,” then-president Ronald Reagan said during a radio address in 1986.<\/p>\n

The measure also played a key role in shifting tariff authority from Congress toward the executive branch, since lawmakers sought a speedy way to roll back the tariffs, experts said.<\/span><\/p>\n

In 1934, the Reciprocal Tariffs Act gave the president the power to increase or reduce tariff levels by up to 50%. A series of subsequent laws helped shift additional tariff authority to the president.<\/p>\n

“Now, Congress doesn’t have much to do with setting tariffs,” Irwin said.<\/p>\n

On the campaign trail, Trump said he could enact tariffs without support from Congress. He is largely accurate in his description of the wide latitude enjoyed by the president in setting and implementing some tariffs, experts previously told<\/a> ABC News.<\/p>\n

“Trump is using the delegated powers to pass tariffs,” Irwin said. “That’s completing the circle of Smoot-Hawley in some sense.”<\/p>\n

Copyright \u00a9 2024, ABC Audio. All rights reserved.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Central Press\/Getty Images (WASHINGTON) — A Republican president-elect pledges support for expansive tariffs as a means of protecting U.S. businesses and hamstringing global competitors. That description may conjure up former President Donald Trump, but it also applies to Herbert Hoover, who led the country nearly a century ago during theRead More →<\/a><\/span><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[156,31,2],"tags":[273,271,276,274,270,123,275,133,124,272,102,103],"yoast_head":"\nWhat to know about the Smoot-Hawley tariffs and what their legacy means for Trump - FM News Talk 92.7 \/ 1450AM KOBE<\/title>\n<meta name=\"description\" content=\"TALK, DONE RIGHT\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lascrucestoday.com\/newstalklc\/what-to-know-about-the-smoot-hawley-tariffs-and-what-their-legacy-means-for-trump\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What to know about the Smoot-Hawley tariffs and what their legacy means for Trump - 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