Causes of the Depression: Smoot Hawley Tariff

Question 1

When did the economic situation begin to deteriorate?

Answer 1

When the Smoot-Hawley Tariff was established in 1930 to safeguard the U.S companies.

Question 2

What happened to import taxes?

Answer 2

They became unbearably high i.e. 50% on imports, which resulted to a decline in trade between the U.S and the foreign nations while economic retaliations were evident.

Question 3

Why did the Smoot-Hawley tariff exacerbate the crisis?

Answer 3

This was timely during the onset of the great depression since increased tariffs led to rise in price and nobody had any money.

Question 4

How did Europe respond to the tariff?

Answer 4

Europe harbored resentment with the U.S and also retaliated with an even higher tariff.

Question 5

What did the tense relations between Europe and the US result in?

Answer 5

This greatly impeded the international trade. Therefore, with less purchases and more production from companies then clearly this would be problematic.