During the 1928 presidential campaign, Herbert Hoover promised higher tariffs for farm products, reflecting strong political pressure from U.S. agriculture. After the economy weakened, that promise became a starting point for a broader, economy-wide tariff bill. This set the stage for a major debate about whether protectionism would help or hurt a downturn.
The U.S. House of Representatives passed a tariff bill sponsored by Representative Willis C. Hawley. As the bill moved forward, industries and farm groups pressed lawmakers to add or raise protections for their products. The bill’s scope expanded well beyond agriculture, increasing the risk of foreign backlash.
After the October 1929 stock market crash, economic fear and falling prices strengthened calls to protect U.S. jobs and producers from imports. This changed the politics around the tariff bill, making it easier for higher rates to gain support. The crash helped turn a tariff debate into a major national policy fight.
The U.S. Senate approved its version of the tariff legislation, associated with Senator Reed Smoot. The close vote showed that the policy was controversial even within the governing party. It also signaled to U.S. trading partners that a significant tariff increase was likely to become law.
In May 1930, a large group of U.S. economists signed a public petition urging President Hoover to reject the tariff. Their main warning was that higher U.S. tariffs could trigger retaliation abroad and worsen the economic downturn by reducing exports. The petition became an early, well-known example of experts opposing major protectionist legislation.
Canada announced and then enacted a major tariff revision in spring 1930, including countervailing duties that could automatically rise to match foreign barriers. This policy was designed in part to respond to U.S. tariff increases and to redirect some purchasing toward the United Kingdom. It foreshadowed a broader pattern: governments using tariffs not just for revenue, but as leverage against other countries’ trade policies.
After the House and Senate reconciled differences, the final Smoot-Hawley measure cleared Congress. By this point, the bill included many high duties across a wide range of products, reflecting intense lobbying and political bargaining. Passage increased the likelihood of an international chain reaction, since many countries depended on export markets to manage the Depression.
President Herbert Hoover signed the Tariff Act of 1930 on June 17, 1930, raising U.S. import duties across thousands of items. The law aimed to protect U.S. farmers and manufacturers, but it also raised costs for importers and invited retaliation from trading partners. It was the last major U.S. tariff law where Congress directly set many specific rates.
When the U.S. tariff changes took effect, Canada’s countervailing duties mechanism raised Canadian duties on many U.S. products. This was a concrete example of retaliation: one country’s higher tariffs directly triggered another’s. The result was a sharper contraction in North American trade flows during an already severe downturn.
Other governments adopted retaliatory tariffs or other trade barriers after Smoot-Hawley, including a mix of new duties, restrictions, and discriminatory policies. This broadened the economic damage by shrinking markets for exporters and discouraging cross-border commerce. The period became known for “beggar-thy-neighbor” policies—steps meant to help one country that end up harming many.
In late 1931, the United Kingdom passed a law enabling temporary duties of up to 100% on certain goods imported in unusually large quantities. This reflected the same broader trend: governments turning away from freer trade as unemployment and financial instability grew. These steps added to the worldwide tightening of trade during the Depression.
With the Import Duties Act 1932, the UK introduced a general 10% tariff on many imports, with some exemptions. This marked a major shift for a country long associated with freer trade. It also reinforced the global movement toward trade blocs and away from open markets.
At the 1932 Ottawa meetings, governments within the British Empire pursued “imperial preference,” favoring trade inside the empire and placing relatively higher barriers on outside countries. This strategy sought to stabilize trade among partners during the Depression but also reduced opportunities for countries outside the bloc. For the United States, it meant another obstacle to recovering exports after Smoot-Hawley.
Representatives of 66 nations met in London in mid-1933 to discuss policies to fight the Depression, including steps to revive trade and stabilize currencies. The conference collapsed without a lasting agreement, showing how hard it was to coordinate international economic policy during crisis. The failure left countries to keep relying on national measures like tariffs, quotas, and exchange controls.
On June 12, 1934, President Franklin D. Roosevelt signed the Reciprocal Trade Agreements Act (RTAA), authorizing negotiated tariff reductions in exchange for reductions by other countries. The RTAA shifted the U.S. approach from across-the-board protection toward bargaining to reopen foreign markets. This policy change is widely seen as a key step in moving away from the Smoot-Hawley retaliation cycle and toward longer-term trade liberalization.
Smoot‑Hawley Tariff Act and International Retaliation (1929–1934)