Cato Daily Podcast Best of Cato Daily Podcast: Smoot-Hawley 81 Years Later
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Apr 24, 2025 
Douglas Irwin, author of "Peddling Protectionism, Smoot Hawley, and the Great Depression," dives deep into the Smoot-Hawley Tariff Act, discussing its disastrous effects on the economy and international trade relations during the Great Depression. He emphasizes the act's role as a cautionary tale against protectionism, linking it to current political dialogues about tariffs. Irwin warns of the potential resurgence of nationalist trade policies and advocates for a more thoughtful approach to global trade, drawing crucial parallels to today’s political climate.
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Origins of Smoot-Hawley Tariff
- Smoot-Hawley Tariff mainly arose from agrarian discontent rather than industrial pressure since farms were struggling in the 1920s. - The tariff raised duties on both agricultural and industrial goods, fueling excessive protectionism in the U.S.
Ignored Economic Warnings
- Economists widely predicted Smoot-Hawley would cause trade to collapse and worsen the economy, but the law passed anyway. - This misjudgment contributed to deepening the Great Depression and ruined Smoot-Hawley's reputation.
Hoover's Mixed Economic Response
- President Hoover was active in trying to combat the Depression through spending and programs, not laissez-faire. - Smoot-Hawley was passed amid many efforts, but its protectionism worsened the economic decline.