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POLI 354 (26)

Power Money and Trade -Smoot Hawley Tariff

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McGill University
Political Science
POLI 354
Mark Brawley

THE PASSAGE OF THE SMOOTH HAWLEY TARIFFThe trade regime after WWIDuring WWI countries raised tariffs The trade regime after WWI During the war each country tried to manipulate its international economic relations to aid its own war effort European governments acted to direct trade and international payments towards political goals BritainEven Britain finally moved away from free trade It wanted to protect domestic industry and reduce importssince it wanted to spend precious foreign currency on war material onlyMcKenna DutiesThe first step away from free trade occurred with the enactment of McKenna Duties 1916Safeguarding of industries Act After the warin 1921they were reinforced and rationalized by the postwar First time since 1846 that Britain raised tariffs US It had been moving towards free trade before the war broke out Underwood tarrif1913 The lowest tariff the us had adopted Why did the US adopt protectionismsince the war was seen as disrputing existing trade patterns the us decided to insulate its own economy by passing newhigher tariffs all major combatants had raised tariffs on industrial goods but were still importing foodUs increased agricultural exports during waronce the war ended euorpen countries raised protectionisl on agriculture Eastern and central Europe empires were dissolvedThe new countries wanted to develop industrial basewhich meant they all adopted high tariffs to discriminate against exprts of finished goods Emergency Tariff 1921Raised duties in a few selected items Signalled a change in behaviourhowever and heralded some fo the tariff competitionThe us raised tariffs across the abord and for the first time raised agricultural tariffs in order to protect the domestic producers who had recentluy lost access to europena markets Repercussion of the war on the economies
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