The Economists’ Smoot-Hawley Tariff Protest of 1930
We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. By raising prices they would encourage concerns with higher costs to undertake production, thus compelling the consumer to subsidize waste and inefficiency in industry.
First, as consumers they would have to pay still higher prices for the products, made of textiles, chemicals, iron, and steel, which they buy. Second, as producers, their ability to sell their products would be further restricted by the barriers placed in the way of foreigners who wished to sell manufactured goods to us.Our export trade, in general, would suffer. Countries can not permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them
There are few more ironical spectacles than that of the American Government as it seeks, on the one hand, to promote exports… while, on the other hand, by increasing tariffs it makes exportation ever more difficult.
A tariff war does not furnish good soil for the growth of world peace.
