Deep Dive
Why did Congress decide to delegate tariff power to the executive branch after the Smoot-Hawley Tariffs?
After the Smoot-Hawley Tariffs, Congress realized they had overstepped and made a mess of the tariff system. They decided to delegate tariff powers to the executive branch to prevent such widespread protectionism in the future.
What were the key industries that initially sought protection through tariffs in the Smoot-Hawley era?
The key industries initially seeking protection were wool and sugar, but the process quickly expanded to include hundreds of other industries, such as goldfish producers and buckwheat growers.
How did the Smoot-Hawley Tariffs impact global trade?
The Smoot-Hawley Tariffs led to a wave of protectionism worldwide, with countries imposing counter-tariffs on U.S. goods. Global trade fell by 26% in the years following the tariffs.
What was the economic impact of the Trump tariffs on American households?
The Trump tariffs, which were largely kept in place by the Biden administration, amounted to a $200 to $300 tax increase on average for American households, according to the Tax Foundation.
How did the Smoot-Hawley Tariffs influence the power of the U.S. president to set tariffs?
After the Smoot-Hawley debacle, Congress delegated tariff powers to the executive branch, giving the president more authority to set tariffs without congressional approval.
What were the unintended consequences of the Smoot-Hawley Tariffs for American egg producers?
American egg producers faced retaliation from Canada, which raised its tariff on eggs from 3 cents to 10 cents. This led to a significant drop in U.S. egg exports to Canada, from nearly a million dozen to just 13,000 dozen.
What is the current status of Trump's steel and aluminum tariffs under the Biden administration?
The Biden administration has largely kept Trump's steel and aluminum tariffs in place, and even increased tariffs on China further in 2024.
How did the Smoot-Hawley Tariffs affect the U.S. economy during the Great Depression?
While the Great Depression was caused by multiple factors, the Smoot-Hawley Tariffs exacerbated the economic downturn by reducing global trade and inviting retaliatory measures from other countries.
What is the main criticism economists have of tariffs like those proposed by Trump?
Economists argue that tariffs, even narrow ones, cause downstream effects, raising costs for consumers and industries that rely on imported goods, ultimately harming the economy.
How did the Smoot-Hawley Tariffs impact the political careers of Reed Smoot and Willis Hawley?
Both Reed Smoot and Willis Hawley were eventually voted out of Congress by their constituents, reflecting the unpopularity of the Smoot-Hawley Tariffs.
- The Smoot-Hawley Tariff Act, passed in 1930, significantly worsened the Great Depression.
- Logrolling in Congress led to a vast number of tariffs on various goods, many of which faced little foreign competition.
- Economists widely opposed the act, predicting its negative impact, which proved accurate.
- The act triggered retaliatory tariffs globally, shrinking international trade.
- The act's failure led to Congress delegating tariff power to the executive branch.
Shownotes Transcript