The False God of “Tariff Prosperity”

Judge for yourself parallels between today and Herbert Hoover’s presidency.

Rejection of Globalism: In 1927, the League of Nations' World Economic Conference issued a report that was critical of protectionism in America and elsewhere. Its report stated that “the time has come to put an end to tariffs, and to move in the opposite direction.”

New Technology and Increased Productivity: In the 1920s, rural electrification sharply raised farm productivity (compare to internet applications and disruptions in businesses today). The over-supply of goods led to bad prices for producers in agricultural markets. Farmers were poor and angry.

Campaign Promise of Protectionism: In 1928, Herbert Hoover strongly appealed to Midwest farmers by promising to raise tariffs on agricultural products.

Proposed Law to Impose Tariffs on U.S. Trading Partners: Hoover won, and Republicans maintained comfortable majorities in the House and the Senate during 1928. Hoover then asked Congress for an increase of tariff rates for agricultural goods and a decrease of rates for industrial goods.

Two Republican leaders— Senator Reed Smoot and Representative Willis C. Hawley— proposed a law to raise U.S. tariffs on 20,000 imported goods. They wound up also imposing tariffs on factory-made goods, to the extreme dismay of Henry Ford and other captains of industry.

Experts' Warning against the Law: In May 1930, 1,028 economists signed a petition asking President Hoover to veto the Smoot-Hawley legislation, formally known as the Tariff Act of 1930. Congress and President Hoover ignored these experts.

Reaction to Smoot Hawley: Trading partners threatened to retaliate against the U.S. if the tariff law was enacted. America’s largest trading partner in 1930—Canada—retaliated by imposing new tariffs on 16 products that accounted altogether for around 30% of U.S. exports to Canada.

Canada developed close trade with the British Empire Economic Conference of 1932.

Effects of Tariff Law: By 1932, the U.S. was in a full-scale depression. Everyone was affected—but the impact was gravest for farmers and industrial workers. 
Sadly and ironically, these were the voters who demanded protectionism and got it.

Also in 1932, workers and farmers voted Sen. Smoot and Rep. Hawley out of office.