The Smoot-Hawley Tariff Act

Summary

History Daily: The Smoot-Hawley Tariff Act
Release Date: June 17, 2025
Host: Lindsey Graham

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Introduction

In the episode titled "The Smoot-Hawley Tariff Act," host Lindsey Graham delves deep into one of the most consequential pieces of legislation in American history and its profound impact on the global economy. This detailed exploration uncovers the intricate political maneuvers, economic theories, and unintended consequences that shaped the course of the Great Depression.

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The Pre-Crash Economy

The Presidency of Herbert Hoover

Herbert Hoover, elected President of the United States in 1929, inherited an economy that seemed robust. Under his administration, the "Hoover Bull Market" saw unprecedented stock market growth, with investors from all walks of life pouring their savings into Wall Street and even borrowing to buy more stocks. Lindsey Graham sets the scene:

"In the months following Hoover's inauguration, the US Economy does indeed seem unstoppable. The stock market surges in what people call the Hoover bull Market." [03:12]

The Fordney-McCumber Tariff

Five years prior, the Fordney-McCumber Tariff had already raised import duties to protect American industries. Despite international appeals for trade liberalization, the U.S. continued its isolationist and protectionist stance, laying the groundwork for future economic turbulence.

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The Stock Market Crash of 1929

Events Leading to Black Tuesday

October 29, 1929, known as Black Tuesday, marked a catastrophic collapse of the stock market. Lindsey Graham narrates the chaotic atmosphere witnessed by reporter Jonathan Leonard:

"The numbers are collapsing faster than anyone can comprehend... This is not just another bad day. This is something else entirely. This is a collapse." [00:00]

Over 16 million shares were sold, resulting in a loss of approximately $14 billion in market value. This crash shattered public confidence, setting the stage for the Great Depression.

Immediate Aftermath

Hoover, confident in the economy's resilience, believed the market would self-correct. However, his optimism proved misplaced as the economic downturn deepened, leading to widespread unemployment and financial instability.

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Hoover's Response: The Smoot-Hawley Tariff Act

Political Pressures and Decision-Making

Faced with escalating economic despair, Hoover found himself under immense political pressure to act decisively. Republican Representatives Willis Hawley and Senator Reed Smoot proposed a bill to raise tariffs on imported goods, aiming to protect American jobs and industries.

"So Hoover decides to move ahead. What began as an attempt to help struggling farmers will become one of the most consequential acts of his presidency." [11:40]

Despite personal reservations and opposition from economists and business leaders like Henry Ford, Hoover signed the Smoot-Hawley Tariff Act into law on June 17, 1930. The act increased U.S. tariffs from an average of 40% to nearly 60% on over 20,000 imported goods.

Content and Implications of the Act

Initially intended to aid struggling sectors, the Smoot-Hawley Tariff quickly ballooned due to lobbying from various industries seeking their own protections. The legislation, far from being a targeted economic aid, became a broad protectionist measure with severe international repercussions.

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International Reaction and Global Impact

Internationally, the Smoot-Hawley Tariff Act ignited a global trade war. Nations retaliated by imposing their own tariffs, effectively stalling international trade. Countries such as Canada, Cuba, Mexico, Italy, Spain, Switzerland, Argentina, and Australia responded swiftly:

"International reaction is swift. One after another, nations raise their own trade barriers." [11:40]

The tit-for-tat restrictions led to a significant decline in U.S. exports, exacerbating the economic downturn both domestically and globally.

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The Great Depression Intensifies

Domestic Effects

The repercussions of the Smoot-Hawley Tariff Act plunged the United States deeper into the Great Depression. American farmers and manufacturers lost critical foreign markets, leading to increased layoffs and soaring unemployment rates. The economic strain was further compounded by severe droughts and dust storms in the Great Plains, transforming fertile lands into wastelands and giving rise to Hoovervilles—shantytowns named derisively after President Hoover.

"Through it all, President Hoover clings to his belief in limited government... But as bread lines grow and shanty towns swell, that philosophy begins to ring hollow." [16:44]

Rise of Hoovervilles

The term "Hoovervilles" became synonymous with the widespread poverty and homelessness caused by the economic collapse, symbolizing public frustration with Hoover's policies and perceived inaction.

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The Political Shift: From Hoover to Roosevelt

The 1932 Election

As the economic situation deteriorated, Hoover's popularity plummeted. The Republican Party fragmented over responses to the crisis, and Franklin D. Roosevelt emerged as a charismatic challenger advocating for bold new policies.

"Where president Hoover is cautious, Roosevelt is daring. Hoover speaks of balanced budgets and market corrections. While Roosevelt promises a new deal for immediate relief." [16:44]

Roosevelt’s New Deal and Policy Reversal

Roosevelt's victory in the 1932 election marked a decisive shift in U.S. economic policy. Upon taking office, Roosevelt swiftly overturned the Smoot-Hawley Tariff Act with the Reciprocal Trade Agreements Act, enabling the president to negotiate trade agreements directly with other nations.

"President Roosevelt believes he can now chart a new course. The legislation he just signed effectively repeals the Smoot-Hawley Tariff Act." [18:25]

This move aimed to restore international trade and economic stability through cooperation rather than isolationism, laying the foundation for the New Deal and the eventual recovery of the U.S. economy.

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Conclusion

The Smoot-Hawley Tariff Act stands as a stark lesson in economic policy and international relations. Intended to protect American industries during a time of crisis, it inadvertently deepened the Great Depression and triggered a global trade war. Lindsey Graham's comprehensive narrative underscores the complexities of governmental decision-making and the far-reaching consequences of protectionist policies. As history unfolded, the act not only shaped the trajectory of the American economy but also influenced global economic strategies, highlighting the delicate balance between national interests and international cooperation.

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History Daily is produced by Airship and Noiser, hosted by Lindsey Graham. For more insightful episodes on pivotal moments in history, subscribe and stay informed about the events that have shaped our world.

Transcript

[Lindsey Graham]

There are more ways than ever to listen to History Daily ad free. Listen with Wondry plus in the Wondery app as a member of Noiser plus at noiser.com or in Apple Podcasts. Or you can get all of History Daily plus other fantastic history [e-mail] it's the morning of October 29, 1929, on Wall street in Lower Manhattan. Reporter Jonathan Leonard makes his way along the crowded sidewalks outside the New York Stock Exchange. He's been covering the stock market long enough to see its mood swing from exuberance to anxiety, but he's rarely witnessed anything like what he saw yesterday. On October 28, the stock market took a dive, with panic selling dominating the trading floor. Over 9 million shares changed hands as major stocks plunged in value. Now Jonathan wants to see if the crisis is passing or getting worse. Clutching his notebook, Jonathan pushes open the doors to the exchange. And immediately a wall of sound hits him. Traders yelling, papers flying, and the endless metallic jangle of the stock picker machines on the floor. Men shove their way through the crowd, desperate to reach the trading posts. Some are red faced with anger. Others are white with fear. One man is just slumped on the ground in despair. Jonathan approaches the traders with questions, but none of them give him a second look. None have the time. The numbers are collapsing faster than anyone can comprehend. Messenger boys race past with fistfuls of paper. There are no buyers, just crowds of desperate men pressing forward, shouting, pleading to sell anything at any price. This is not just another bad day. This is something else entirely. This is a collapse. Over the course of the day, over 16 million shares will be sold and around $14 billion in market value will be lost. This crash will come to be known as Black Tuesday and will shatter public confidence in the US Economy and mark the beginning of the Great Depression. In the months that follow, Americans will demand action and Washington will scramble for answers. Sweeping legislation will raise America's trade barriers to unprecedented heights. But instead of protecting the economy, the Smoot Hawley Tariff act will only push the world further into crisis when it's enacted on June 17, 1930.

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If you have attrcm, talk to your cardiologist about a Truby or visit attruby.com, that's attruby.com to learn more from Noycer and Airship I'm Lindsey Graham and this is History D History is made Every day on this podcast, every day, we tell the true stories of the people and events that shaped our world. Today is June 17, 1930. The Smoot Hawley Tariff Act. It's May 23, 1927, inside a grand hall in Geneva, Switzerland, two and a half years before Black Tuesday. From the podium, Belgian statesman Georges Tunis surveys a crowd. Before him, a chattering sea of delegates from 50 countries. Georges straightens his papers and then clears his throat slowly. The voice is quiet. The shifting of chairs stills, and all eyes turn toward Georges, president of the first ever World Economic Conference. This conference has been convened by the League of Nations, a fledgling international body born in the aftermath of World War I. It's been tasked with preventing another global catastrophe. But taking the principles of peace and putting them into practice has proven difficult. In the years since the war's end in 1918, economic tensions have mounted, nationalism and isolationism are on the rise, and in country after country, governments have responded by throwing up trade barriers and slapping tariffs on imports. Many economists worry that these trade restrictions threaten to destabilize the post war recovery. So for the past three weeks, delegates from 50 nations have gathered to discuss the issue. Now it's time for Georges to deliver the Closing remarks. He begins by commending the delegates for their collaboration. Despite the many differences between their respective countries, they have found common ground. They've agreed on the need for reform, on reducing tariffs across the board, and on lifting barriers to foster international trade. In Georges view, the conference has been a success. But the spirit of international cooperation on display in Geneva fails to carry beyond the conference hall. The delegates produce a report rich with lofty ideals and economic recommendations. But in the end, it's just a report. There are no binding commitments, no enforcement mechanisms, just words on paper. And the report's arguments fail to sway many governments, including the United States, which is already pursuing a different path. Five years ago, the US Congress passed the Fordney McCumber tariff, a sweeping law that raised import duties to historic highs in an effort to protect American industry. And even after these delegates in Geneva call for liberalization and lower barriers to trade, Washington shows no sign of reversing course. Six months after the World Economic Conference in November 1927, Republican candidate Herbert Hoover is elected President of the United States. He comes to office promising protective tariffs that will boost farming and predicts a final triumph over poverty. In the months following Hoover's inauguration, the US Economy does indeed seem unstoppable. The stock market surges in what people call the Hoover bull Market. Across the country, Americans of all classes pour their savings into Wall Street. Many even borrow money to buy more stocks. And on September 3, 1929, the stock market reaches record heights. But soon after, cracks in the economy begin to show. Stock prices dip. Then, in late October, they plunge. In a matter of weeks, the stock market loses nearly half its value. Lifelong savings vanish, and a decade of optimism evaporates almost overnight. Still, Hoover insists the economy is fundamentally sound and resists government intervention. He, like many others, expects that the market will correct itself. But no such correction occurs. Instead, Hoover's campaign promise of enduring prosperity unravels rapidly. Investors tighten their belts, as does the general public. And without the support of investors or consumers, businesses suffer, layoffs beginning, and unemployment skyrockets. The atmosphere of scarcity sends Americans rushing to withdraw their money from the banks, fearing they might go under. But the more money is pulled out, the closer banks slip towards insolvency. With turmoil mounting, politicians turn to familiar tools. In Congress, Republican Representative Willis Hawley and Republican Senator Reed Smoot start to brainstorm a bill that will raise tariffs even higher by placing expensive taxes on imported goods. Smoot and Hawley think they can shield American jobs and revise domestic production. Their bill begins modestly aimed at protecting struggling farmers but it quickly balloons. Lobbyists flood Washington with each industry demanding its own safeguard against cheap imports. By the time the so called Smoot Hawley Tariff act clears Congress, the bloated legislation proposes higher tariffs on over 20,000 imported goods. Economists warn it'll backfire. More than a thousand sign a petition urging President Hoover to veto the bill. Meanwhile, the automobile tycoon Henry Ford declares it an economic stupidity and spends an entire evening trying to persuade the President not to sign the bill. Hoover starts to waver, but the political pressure on him is mounting. With unemployment rising and public confidence plummeting, protectionism offers the allure of a potentially simple solution. So Hoover decides to move ahead. What began as an attempt to help struggling farmers will become one of the most consequential acts of his presidency. It was signed in the belief that protectionism can bring stability in a time of crisis, but instead it will test the very foundations of the global economy. History Daily is sponsored by Indeed. 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[Lindsey Graham]

And find a location near you. Subject to credit approval. It's June 17, 1930, at the White House in Washington, D.C. president Herbert Hoover sits at his desk in the Oval Office, a fountain pen in hand. Before him lies an almost 200 page document, the smoot Hawley Tariff Act. It has just been passed by Congress, and all it needs to take effect now is Hoover's signature. If signed, the act will raise tariffs on a wide range of imports, increasing the average tariff from 40 to nearly 60%. It's an extreme measure, and Hoover knows it. For days, economists, executives and foreign leaders have pleaded with him not to sign the bill. Even before they voiced their opposition, Hoover had his own reservations. He doesn't want to undermine his commitment to international cooperation. And in private, he's even described the bill as vicious, extortionate and obnoxious. But the pressure to act, to do something, is immense. In the face of one of the greatest economic crises in history, Hoover finds himself boxed in by politics. This new bill has strong Republican support, and if the President vetoes it, he risks alienating his own party. But if he signs it, he'll be gambling with the global economy. To Hoover, it feels like there's no good option available. And if that's the case, he decides he should at least fulfill the promises he's made to support struggling farmers. So with a stroke of his pen, Hoover signs the Smoot Hawley Tariff act into law and raises U.S. tariffs to their highest level in a century. The international reaction is swift. One after another, nations raise their own trade barriers. In response, Canada quickly slaps tariffs on American goods. Cuba, Mexico, Italy, Spain, Switzerland, Argentina and Australia all follow suit with their own retaliatory tariffs, quotas and boycotts. The following year, the major economies of the United Kingdom and France do the same. The Tariff act promised relief for the American economy, but all it's done is kickstart a global trade war. And as the tit for tat restrictions continue to escalate, US Exports decline steeply as American farmers and manufacturers lose access to great critical foreign markets, businesses lay off even more workers. And what was once hoped to be a passing recession develops into something far worse. The Great Depression is now a global crisis with no end in sight. To make matters even worse, in the United States, a severe drought sends dust storms sweeping across the Great Plains. Fertile farms are transformed into wastelands, and thousands of people flee their homes. Shantytowns spring up on the outskirts of cities to house them. And people begin calling them Hoovervilles in a bitter nod to the man in the White House who once promised to end poverty in America. Through it all, President Hoover clings to his belief in limited government. He resists large scale federal intervention, convinced that voluntary cooperation among businesses and local relief efforts can turn the tide. But as bread lines grow and shanty towns swell, that philosophy begins to ring hollow. By the summer of 1932, Hoover is a man under siege. His approval rating has plummeted, and the Republican party is fracturing over the correct response to the deepening crisis. And while signing the tariff bill strengthened Hoover's ties with some Republican leaders, the ensuing economic decline has destroyed his standing with many of the party's more progressive members. Into this vacuum of leadership steps a charismatic challenger, the Democratic governor of New York, Franklin Delano Roosevelt. Where president Hoover is cautious, Roosevelt is daring. Hoover speaks of balanced budgets and market corrections. While Roosevelt promises a new deal for immediate relief, Roosevelt's campaign gains support not just from the Democratic party, but from Republicans as well. And as Roosevelt and Hoover begin their battle for the oval Office, many of the progressive Republican senators who campaign for Hoover in 1928 endorse Roosevelt. Instead, voters too, begin to shift. Wary of hardship and impatient with government inaction, a growing number of Americans are looking for bold new leadership. And on election day, the people render their verdict in a landslide for Roosevelt. Hoover is crushed at the ballot box. He takes just six states. While Roosevelt wins more than any first time presidential candidate before him. President elect Franklin Roosevelt will arrive in Washington, D.C. facing a nation in ruins. But unlike his predecessor, Roosevelt will be eager to act with the American people behind him. He will sweep into office with a mandate for change and a vision for global economic recovery.

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[Lindsey Graham]

12, 1934, in Washington, D.C. two years after Herbert Hoover Hoover's electoral defeat. Inside the Oval Office at the White House, President Franklin D. Roosevelt leans over his desk and signs his name with a flourish. The pen scratches across paper, finalizing a piece of legislation that marks a dramatic reversal in US Economic policy. In the very same spot four years ago, President Herbert Hoover signed the Smoot Hawley Tariff act, an aggressive protectionist measure that raised U.S. tariffs to historic high the fallout was swift and brutal. International trade collapsed, retaliation spiraled, and the global economy sank deeper into depression. But President Roosevelt believes he can now chart a new course. The legislation he just signed effectively repeals the Smoot Hawley Tariff Act. Titled the Reciprocal Trade Agreements act, it gives Roosevelt unprecedented power. For the first time, the president can negotiate directly with foreign governments to lower tariffs without needing congressional approval. This act signals a major philosophical shift that sees trade not as a threat but as a tool for diplomacy and recovery. Rather than walling off the American economy, Roosevelt wants to open it up on fair terms. If other countries agree to reduce their own tariffs, then the US Will respond in kind. It's a bet on cooperation, and it works. Over the next decade, Roosevelt's administration negotiates trade agreements with 19 countries including key trading partners. It's a first step toward a more interconnected world economy and a preview of the liberalized trade policies that will define the global order in the aftermath of World War II. Slowly, the American economy will begin to stabilize, and by the early 1940s, spurred by a combination of reform and global events, the United States will emerge from the economic collapse that began on Wall street and was intensified in the Oval Office when the Smoot Hawley Tariff act became law on June 17, 1930. Next on History Daily June 18, 1982 the body of Italian banker and convicted fraudster Roberto Calvi is discovered hanging from a bridge in London. From Noiser and Airship this is History Daily Hosted, edited and executive produced by me, Lindsey Graham Audio editing by Mohammed Shazid Sound design by Molly Bond Supervising Sound Designer Matthew Filler Music by Thrum this episode is written and researched by Alexandra Curry Vuffman Edited by Joel Callen Managing Producer Emily Byrd Executive producers are William Simpson for Airship and Pascal Hughes for Noiser.

[Herbert Hoover]

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