Hawley-Smoot Tariff

Definition

The Hawley-Smoot Tariff Act was passed in 1930 during President Herbert Hoover's administration. It raised U.S import duties significantly with hopes of protecting American farmers and manufacturers from foreign competition.

Analogy

Imagine if you had a lemonade stand and wanted to make sure no one else could sell lemonade at lower prices than you on your street. So you convince everyone on your street that they should charge extra for any other kid who wants to set up their own stand there - that’s kind of what happened with Hawley-Smoot Tariff but on an international scale!

Related terms

Protectionism: This is a policy aimed at shielding domestic industries from foreign competition by taxing imports.

Trade War: A situation where countries try to damage each other's trade by imposing tariffs or quota restrictions.

Great Depression: A severe worldwide economic depression that took place during the 1930s. The Hawley-Smoot Tariff is often cited as one of the factors that deepened it.