In June of 1930with the American economy already on its knees after the collapse of Wall Street of ’29, the United States congress made a choice destined to change the course of history: to raise a wall of rates to protect the internal market. The Tariff Actbetter known as Smoot-Hawleywas not only an economic measure, but a very hard blow to the fragile balance of world trade.
The idea was simple: to increase the duties on Over 20,000 imported products To protect agriculture and American industry, threatened by the crisis. But the effect was devastating. Within a few months, Europe, Canada and other powers reacted with harsh commercial retaliationclosing the doors to American products and triggering an unprecedented protectionist spiral.
The domino effect: the collapse of global trade
The international response did not wait: By 1932, over two dozen countries adopted similar protectionist measuresby collapsing American exports and reducing global commercial exchanges of approximately two thirds. What was supposed to be an embankment to the crisis turned into an accelerator of the Great depressionaggravating bank failures, unemployment and misery.
But the effects were not only cheap. American isolationism pushed many nations to seek new alliances and self -sufficiency strategiesfurther fragmenting the international order. In Germany, exasperated protectionism strengthened economic and social resentment, favoring Hitler’s ascentwhile in Japan he pushed Tokyo to an aggressive expansion in Asia.
A late reverse
Only four years later, with the world now watched in the crisis, the president Franklin D. Roosevelt He decided to reverse the course. With the Mutual Trade Agreements Act of 1934the United States began to negotiate bilateral tariff reductions, laying the foundations for a new model of commercial cooperation.
But the damage was done. The Smoot-Hawley Tariff Act failure He remained as a warning of what happens when protectionism becomes an economic weapon. Today, almost a century later, the story continues to repeat themselves: every time the great powers try to close themselves in themselves, the whole world pays the price.