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How did the Hawley-Smoot Tariff help spread the depression globally?

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User Skeniver
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The Hawley-Smoot Tariff raised prices on foreign imports, making it impossible for them to compete in American markets.
answered
User Milan Solanki
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The Smoot-Hawley tariff, passed in June 1930, raised import tariffs to unprecedented levels, which virtually closed the US borders to foreign products. This generated a counterpart of the other countries, which also imposed tariffs on American products.

The Theory of International Trade demonstrates that countries tend to improve their situation when they market, producing what they have the advantage of production and what they can not efficiently produce when compared to other countries. That is, a country must import the goods whose productive efficiency is low and export the goods whose productive efficiency is high.

Thus, in a situation of economic depression, the opening of trade would be a way of stimulating the economy of all countries to emerge from the crisis, since these countries would find demand to dispose of their products. However, the Moot-Hawley tariff stipulated the opposite, making the economies more closed to the commerce and aggravating the crisis.

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User Matthew Brent
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