Smoot-Hawley TariffThe Smoot-Hawley Tariff Act of 1930 raised US tariffs on over 20,000 dutiable items to record levels, and, in the opinion of many economists, protracted the Great Depression.
The act was championed by Senator Reed Smoot, a Republican from Utah, and Congressman Willis C. Hawley, a Republican from Oregon. President Herbert Hoover had asked Congress for a downward revision in rates, but Congress raised rates instead. While many economists urged a veto, Hoover thought he could finesse the law through the Tariff Commission, and signed the bill. Although the tariff was passed after the Stock Market Crash of 1929, many economic historians consider it a factor in deepening the Great Depression. As nations resorted to protectionism, the general amount of international trade decreased, causing the economy to slow.
In part as a result of the Smoot-Hawley Tariff and other countries' responses to it, the post-World War II world saw a push towards multilateral trading agreements that would prevent a similar situation from unfolding. This lead in part to the Breton Woods Agreement in 1944 and the General Agreement on Tariffs and Trade (GATT) in the 1950s.
There is still some historical debate as to whether the tariff was harmful or not. A revenue-generating tariff can be beneficial to an economy, if other countries do not respond with tariffs of their own. There has been debate as to whether other countries raised their own tariffs as a result of the Smoot-Hawley Tariff, or if they were simply attempting to accomplish the same goal as the United States. Much of this debate has been centered upon Canada, the United States' largest trading partner, which raised their tariffs substantially. The cause of the Canadian decision is still disputed, however.