Question

What long-term impact did the 1930 Smoot-Hawley Tariff have upon the economic crisis?

• A. It helped ease the crisis by allowing Europeans to purchase American products cheaply.
• B. The high tariff rates added to the increased tension between the United States and Japan during the late 1930 s.
• C. It permitted the British and French to negotiate tariff rates in order to repay their WWI loans
• D. Its low rates deepened the crisis. further depleting cash out of American banks.
• E. Its high rates caused retaliation and restrictions on American trade abroad.

Answer 1

The correct option is E Its high rates caused retaliation and restrictions on American trade abroad.

The pro-business policies of the Republican-controlled Congress of the era led to the 1930 passage of this high tariff The protectionist goal of the tariff backfired within a few years due to retaliatory tariffs initiated by other nations. This, in turn, led to decrease in American trade abroad, serving to worsen America's overall economic health. The Smoot-Hawley Tariff was chiefly aimed at protecting the farm industry from European competition.Japan was not a competing nation in the agricultural economy due to its poor farmland.