Money & Finance › Economics & schools of thought › Tariffs and trade wars
Smoot–Hawley Tariff Act (1930)
June 1930· Law or rule
Fact, law or dataA rule, statute, definition or measured number.
A 1930 US law raising tariffs on thousands of imports, which provoked retaliation abroad as the Great Depression deepened.
See it on the Money & Finance map →How it works
Begun in 1929 to help struggling farmers, the bill grew as industry lobbies added goods; Senator Reed Smoot and Representative Willis Hawley gave it their names. More than 1,000 economists petitioned President Hoover to veto it. He signed it on June 17, 1930. Average duties on taxed imports reached about 59% by 1932, partly because fixed-dollar duties grew heavier as prices fell. Canada, European countries and others retaliated, and world trade shrank by about two-thirds in value from 1929 to 1934.
Why it matters
It became shorthand for protectionism gone wrong, and led Congress in 1934 to let presidents negotiate tariff cuts, the root of postwar free-trade deals.
Facts, rules and data
The statute and its tariff schedules; the economists' petition, printed in The New York Times in May 1930; Douglas Irwin's Peddling Protectionism (2011) measures its effects.
Debates and risks
Whether its lessons apply to the 2025–26 tariffs, imposed in a growing economy rather than a collapsing one, is argued.
Connections (2)
▸Smoot–Hawley Tariff Act (1930) worsened The 1929 crash and the Great DepressionMainstream view
The connection
By raising import prices and prompting retaliation, Smoot–Hawley cut US exports, especially farm goods, just as demand was collapsing, and world trade fell sharply. But exports were only about 5% of US GDP, so most economists judge it worsened the Depression modestly; the bigger cause was the collapse of money and banks.
When and why
Signed June 17, 1930, as the downturn deepened; retaliation came from Canada, Spain, Italy, France and others through 1930–32.
How solid is the link?
Trade statistics show steep falls in US exports and imports; Douglas Irwin estimates the tariff explains perhaps a quarter of the drop in US imports, falling incomes most of the rest.
Debates and risks
How much it damaged confidence and spread the Depression abroad, beyond its direct trade effects, is debated.
▸Smoot–Hawley Tariff Act (1930) is the cautionary tale of Tariffs and trade warsFact, law or data
The connection
Smoot–Hawley became the textbook example of protectionism backfiring: higher duties, retaliation and shrinking trade during a slump. Its lesson led Congress in 1934 to let presidents negotiate tariff cuts with other countries, and shaped the postwar GATT. Opponents of new tariffs, including in 2025, still invoke it.
When and why
Washington, 1930; the Reciprocal Trade Agreements Act of 1934, under Franklin Roosevelt and Secretary of State Cordell Hull, began the reversal.
How we know
The 1934 act's history and decades of congressional and presidential speeches cite it directly; it is a fixture of economics textbooks.
Debates and risks
Some historians argue its reputation exceeds its actual effect, and that the real lesson concerns timing and retaliation more than tariffs as such.