Smoot–Hawley Tariff Act - Wikipedia
en.wikipedia.org
  • Initiateofthevoid@lemmy.dbzer0.comEnglish
    17·
    20 hours ago

    and there a lot of economists who say it didn’t have that much of an effect at all.

    Source? To my knowledge Smoot-Hawley is pretty widely regarded as the worst possible move at the worst possible time. Protectionism doesn’t work when domestic purchasing power is already collapsing. Agreed on the rest though.

    • Justin@lemmy.jlh.nameEnglish
      5·
      19 hours ago

      There is some contention about whether this can necessarily be attributed to the tariff. The Great Depression was already in motion before Smoot-Hawley, mainly due to financial instability, falling demand, and poor banking practices. However, the tariff worsened the crisis by shrinking global trade, hurting farmers, and reducing employment in export-dependent industries. Had it not passed, the Depression still would have occurred, but perhaps with less severity.

      Monetarists, such as Milton Friedman, who emphasized the central role of the money supply in causing the depression, considered the Smoot–Hawley Act to be only a minor cause of the Great Depression in the United States.

      https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act

      yeah maybe my nuance leaned too much to the no side, but I wanted to explain tariffs a bit. Trump tariffs are not protectionism or coercion, they’re just stupid.

      • humanspiral@lemmy.caEnglish
        1·
        12 hours ago

        Most people here love blaming Stalin for more than he is responsible for. The Soviet famine, was a global famine, and its roots are in this Smoot Hawley tariff act. Stalin gets blamed for upholding communist principles instead of submitting to Kulak farmer extortionist pricing. But he was also saddled with US pressure to repay debts with food. The tariff origins are that throughout the world, reciprocal tariffs meant not growing any surplus food, because you couldn’t sell it abroad, and then making too much food just made prices lower. A bit of a drought somewhere, and FUBAR.

      • WraithGear@lemmy.worldEnglish
        6·
        19 hours ago

        I was thinking about the protectionism though… like in order for the tariff to work, the us would have to also manufacture the good that is being tariffed. But we don’t produce a lot here…and also even if we did… i guarantee the us business would jack up the prices to be competitive with the foreign price After tariffs and pocket the money. Making the whole thing moot.

        • Initiateofthevoid@lemmy.dbzer0.comEnglish
          5·
          18 hours ago

          The “protectionism” falls flat the moment you consider that the tariffs blanket all goods. If you want to dramatically expand American industry, you don’t start by raising the price of steel and raw materials.

          • WraithGear@lemmy.worldEnglish
            5·
            17 hours ago

            Yea no matter how you slice it, there are no good use of tariffs, and if one were to insist, then it would only be like just barley enough to push up the price above parity, and only on very select items. But then if the other country does it back it goes in favor to the nation that is more industrial.

            • Initiateofthevoid@lemmy.dbzer0.comEnglish
              6·
              16 hours ago

              But then if the other country does it back it goes in favor to the nation that is more industrial.

              Correct! That’s what Cavallo et al found when the Trump administration tariffed China in 2018. US profit margins decreased on both imports AND exports, while China’s remained largely unchanged.

              According to their analysis, American tariffs hurt Americans more than literally anyone else.

              Fun fact, the Trump Administration cited Cavallo et al as supporting evidence for their tariff calculations.

              • Ledericas@lemm.eeEnglish
                1·
                1 hour ago

                The soybean tariffs, china found other countries quite quickly into counter the tariffs, and they largely abandoned the US of soybeans export

      • Initiateofthevoid@lemmy.dbzer0.comEnglish
        51·
        18 hours ago

        Yeah, sorry to say you were pretty off base friend. Smoot-Hawley didn’t start the fire, but it poured fuel all over the flames and locked the firemen out of the building.

        Friedman was an advisor to Reagan and Thatcher. He was a libertarian who genuinely believed that economic prosperity hinged almost entirely on just printing more money. His economic theories are all over the place, but even he acknowledges that tariffs generally don’t work:

        … [Friedman] uses tariffs as an example of a policy that brings noticeable financial benefits to a visible group, but causes worse harms to a diffuse group of workers and consumers

        • jonjuan@programming.devEnglish
          1·
          12 hours ago

          I think you can make a very good argument that the Smoot Hawley tarrifs were the main cause of Great Depression

      • Match!!@pawb.socialEnglish
        3·
        17 hours ago

        “both sides” but the two sides are “it was bad” and “it was disastrously bad”