Legal Definitions - Tariff Act of 1930

The Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act, was a law passed in 1930 that increased the rates of tariffs on imported goods in the United States. This law was created to protect American businesses and farmers from foreign competition. However, it had unintended consequences that worsened the Great Depression.

The Smoot-Hawley Tariff Act raised tariffs on most imported goods, making them more expensive for American consumers. This led to retaliatory tariffs from other countries, which hurt American exports and made the economic situation worse.

For example, if a foreign company wanted to sell a product in the United States, they would have to pay a higher tariff than before. This made their product more expensive for American consumers, who might choose to buy a cheaper American-made product instead. However, other countries responded by raising their own tariffs on American goods, making it harder for American businesses to sell their products overseas.

Overall, the Tariff Act of 1930 had negative effects on the American economy and worsened the Great Depression.