Biggest US economic blunder. Google it.
The Smoot-Hawley Tariff Act, also known as the Tariff Act of 1930, was a law that increased tariffs on imported goods to the United States by about 20%:
Purpose
The law was intended to protect American farmers and other industries from foreign competitors.
Impact
The Smoot-Hawley Tariff Act led to a decline in global trade, which contributed to the Great Depression. The law also raised the prices of food and other items.
Reaction
At least 25 countries responded to the Smoot-Hawley Tariff Act by increasing their own tariffs on American goods.
Supporters
The law was sponsored by Senator Reed Smoot of Utah and Representative Willis Hawley of Oregon.
Opposition
More than 1,000 economists urged President Herbert Hoover to veto the bill.
Result
The Smoot-Hawley Tariff Act did not work, and the United States sank deeper into the Great Depression. In 1932, voters turned the majority in both houses over to the Democrats, who booted Smoot and Hawley out of office.
Legacy
The Smoot-Hawley Tariff Act highlighted the dangers of protectionist trade policies for the world economy. After the law, most countries promoted free trade agreements.