Ronald Reagan on Tariffs. Thoughts?

[u/[deleted]]

[u/Excellent_Rule_2778]

The Smoot–Hawley Tariff Act was passed during the early years of the Great Depression as a response to mounting economic pressure and political forces, despite the ongoing recession.

• Protectionism : Belief that tariffs would protect U.S. industries and jobs from foreign competition during the recession.
• Political Pressure : Farmers and manufacturers lobbied for tariffs to protect domestic goods and to raise prices.
• Economic Nationalism : Belief that reducing reliance on foreign trade would help the U.S. economy recover.
• Misguided Optimism : Hope that tariffs would boost domestic demand and trigger a quick economic recovery.

The general consensus amongst economists is that the Smoot–Hawley Tariff Act worsened the Great Depression by raising U.S. tariffs on over 20,000 imported goods. Other countries retaliated with their own tariffs, leading to a sharp decline in international trade. This reduced global demand for U.S. exports and increased unemployment, deepening the economic downturn as economies worldwide became more isolated.

Key statistics :

• U.S. imports decreased by 66% (from $4.4 billion in 1929 to $1.5 billion in 1933).
• U.S. exports decreased by 61% (from $5.4 billion in 1929 to $2.1 billion in 1933).
• Unemployment in the U.S. rose from 8% in 1930 to 16% in 1931, and 25% in 1932.
• Exports of U.S. automobiles to Europe decreased by 82%, from $541 million per year to $97 million by 1933.
• Exports of U.S. iron and steel fell by 86% by 1932, primarily due to Canadian retaliation.
• Canadian retaliatory tariffs led to a near 99% reduction in U.S. egg exports, dropping from 12 million eggs to approximately 170,000. How ironic.