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Smoot–Hawley Tariff Act: Difference between revisions
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==End of tariffs== | ==End of tariffs== | ||
The 1932 | The 1932 Democratic campaign platform pledged to lower tariffs. After winning the election, President [[Franklin D. Roosevelt]] and the now-Democratic Congress passed [[Reciprocal Trade Agreements Act]] of 1934. This act allowed the President to negotiate tariff reductions on a bilateral basis and treated such a tariff agreement as regular legislation, requiring a majority, rather than as a treaty requiring a two-thirds vote. This was one of the core components of the trade negotiating framework that developed after World War II. After World War II, that understanding supported a push towards multilateral trading agreements that would prevent similar situations in the future. While the [[Bretton Woods system|Bretton Woods Agreement]] of 1944 focused on foreign exchange and did not directly address tariffs, those involved wanted a similar framework for [[international trade]]. President [[Harry S. Truman]] launched this process in November 1945 with negotiations for the creation of a proposed [[International Trade Organization]] (ITO).<ref>{{cite web |title=Statement by the President on the Forthcoming International Conference on Tariffs and Trade |url=https://www.trumanlibrary.gov/library/public-papers/248/statement-president-forthcoming-international-conference-tariffs-and |work=[[Harry S. Truman Library & Museum]]}}</ref> | ||
As it happened, separate negotiations on the [[General Agreement on Tariffs and Trade]] (GATT) moved more quickly, with an agreement signed in October 1947; in the end, the United States never signed the ITO agreement. Adding a multilateral "most-favored-nation" component to that of reciprocity, the GATT served as a framework for the gradual reduction of tariffs over the subsequent half century.<ref>{{Citation |url=http://www.wto.org/English/thewto_e/whatis_e/tif_e/fact4_e.htm|title=Understand the WTO: The GATT years: from Havana to Marrakesh|work=[[World Trade Organization]]}}.</ref> Postwar changes to the Smoot–Hawley tariffs reflected a general tendency of the United States to reduce its tariff levels unilaterally while its trading partners retained their high levels. The American Tariff League Study of 1951 compared the free and dutiable tariff rates of 43 countries. It found that only seven nations had a lower tariff level than the United States (5.1%), and eleven nations had free and dutiable tariff rates higher than the Smoot–Hawley peak of 19.8% including the United Kingdom (25.6%). The 43-country average was 14.4%, which was 0.9% higher than the U.S. level of 1929, demonstrating that few nations were reciprocating in reducing their levels as the United States reduced its own.<ref>Lloyd, Lewis E. ''Tariffs: The Case for Protection''. The Devin-Adair Co., 1955, Appendix, Table VI, pp. 188–189</ref> | As it happened, separate negotiations on the [[General Agreement on Tariffs and Trade]] (GATT) moved more quickly, with an agreement signed in October 1947; in the end, the United States never signed the ITO agreement. Adding a multilateral "most-favored-nation" component to that of reciprocity, the GATT served as a framework for the gradual reduction of tariffs over the subsequent half century.<ref>{{Citation |url=http://www.wto.org/English/thewto_e/whatis_e/tif_e/fact4_e.htm|title=Understand the WTO: The GATT years: from Havana to Marrakesh|work=[[World Trade Organization]]}}.</ref> Postwar changes to the Smoot–Hawley tariffs reflected a general tendency of the United States to reduce its tariff levels unilaterally while its trading partners retained their high levels. The American Tariff League Study of 1951 compared the free and dutiable tariff rates of 43 countries. It found that only seven nations had a lower tariff level than the United States (5.1%), and eleven nations had free and dutiable tariff rates higher than the Smoot–Hawley peak of 19.8% including the United Kingdom (25.6%). The 43-country average was 14.4%, which was 0.9% higher than the U.S. level of 1929, demonstrating that few nations were reciprocating in reducing their levels as the United States reduced its own.<ref>Lloyd, Lewis E. ''Tariffs: The Case for Protection''. The Devin-Adair Co., 1955, Appendix, Table VI, pp. 188–189</ref> | ||