Question

based on the arguments advanced in this chapter, why, in your opinion, did the beggar-thy-neighbor tariff (smoot-Hawley tariff) of 1930 perhaps slow the American recovery between 1930 and 1934?

Answer 1

In my opinion the adoption of the beggar-thy-neighbor tariff in U.S. contributed to a drastic contraction of international trade; and consequently slows the U.S. recovery between 1930 and 1934. The beggar-thy-neighbour tariff (also called Smoot-Hawley Tariff Act 1930 increased the import duties with an intent of protecting U.S. businesses and farmers, however added considerable strain to the global economic climate of the Great Depression. The act raised already high rates of tariff in U.S.; and consequently prompted retaliation from global governments, and numerous overseas banks began to fail. Between the period 1930 and 1934 U.S. imports from and exports to Europe decreased by nearly two-thirds. The imposition of high tariffs, new quotas for imports, and strict exchange restrictions caused a huge delay in terms of recovery between 1930 and 1934.