Which economic outcome is associated with the Smoot-Hawley Tariff Act according to economists?

Which economic outcome is associated with the Smoot-Hawley Tariff Act according to economists?

• A. Reducing American exports and imports by more than half
• B. Increasing American exports
• C. No effect on trade
• D. Expanding global trade

Answer: (A)

Raising tariffs tends to shrink international trade. The Smoot-Hawley Tariff Act of 1930 significantly increased duties on many imports, and economists generally say this move reduced both U.S. imports and exports. By inviting retaliatory tariffs from other nations and raising costs for goods, it dampened global trade activity and worsened economic conditions. That’s why the outcome most economists associate with Smoot-Hawley is a substantial drop in trade for the United States—often described as a decline in exports and imports by a large margin. The other options describe trade expansion or no effect, which contradicts the historical impact of this protectionist policy.

Raising tariffs tends to shrink international trade. The Smoot-Hawley Tariff Act of 1930 significantly increased duties on many imports, and economists generally say this move reduced both U.S. imports and exports. By inviting retaliatory tariffs from other nations and raising costs for goods, it dampened global trade activity and worsened economic conditions. That’s why the outcome most economists associate with Smoot-Hawley is a substantial drop in trade for the United States—often described as a decline in exports and imports by a large margin. The other options describe trade expansion or no effect, which contradicts the historical impact of this protectionist policy.