Cato Daily Podcast
Best of Cato Daily Podcast: Smoot-Hawley 81 Years Later
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.
09:29
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Quick takeaways
- The Smoot-Hawley Tariff Act was a misguided attempt to protect farmers that ultimately exacerbated the Great Depression and trade tensions.
- Its legacy illustrates the importance of trade liberalization, shaping modern U.S. trade policies towards greater cooperation and reciprocity.
Deep dives
The Origins and Impact of the Smoot-Hawley Tariff Act
The Smoot-Hawley Tariff Act was heavily influenced by agrarian discontent during the 1920s, despite a booming industrial economy. Republican leadership sought to support struggling farmers by imposing tariffs on imports, which ultimately harmed the very agricultural sector they intended to protect, as many farmers relied on exports. The legislation's passage coincided with the onset of the Great Depression, leading to significant trade collapse and escalating trade tensions as other nations retaliated against U.S. exports. Economists had forewarned about these consequences, yet President Hoover ignored their advice, which exemplifies the misjudgments in U.S. trade policy during this critical period.
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